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Volume 18 March 2008 Number 1
The new education and exam requirements that have been
publicized for the last four years became effective January 1,
2008. These changes represent the largest change in qualification
requirements since appraiser licensing began in 1991. The new
criteria will apply to new applicants and also to applicants who are
upgrading a current level of licensure. A detailed explanation of
the minimum requirements to become a registered trainee or to
upgrade to certified residential or general is contained in an article
in this publication.
Information that is required reading of all applicants and a
new application is located on our website at www. ncappraisal
board. org. After accessing the homepage, click on Forms and then
2008 Real Property Appraiser
Qualification Criteria
Governor Michael F. Easley has appointed J. David Brooks of
Oxford to the Board for a three- year term. Mr. Brooks attended
North Carolina State University and has been in the appraisal
business for over 22 years and was certified in 1991. He is cur-rently
the owner of Brooks Appraisals, Inc., with primary business
in Vance, Granville, Warren and Person Counties. Mr. Brooks
is very active in church, civic and government organizations in
his local community. He is a deacon, Trustee of Vance Granville
Community College and past Chairman of the Granville County
Commissioners. He and his wife, Melinda, make their home in
Granville County.
Speaker of the House Joe Hackney has appointed Donald S.
Johnson to the Board to fill the remainder of the term of W. Tom
Morgan who resigned due to health reasons. Mr. Johnson is a cer-tified
general appraiser and is a member of the Appraisal Institute
with the designation of MAI. He is a current member of the Ethics
Administration Division of the Appraisal Institute. He is President
of Johnson and Knight Appraisal Services located in Henderson.
He has a BA degree from the University of South Florida and his
practice concentrates on the appraisal of complex properties in a
narrative format. Mr. Johnson and his wife Nancy, who is also an
MAI, make their home in Franklin County.
Governor Michael F. Easley has reappointed J. Vance
Thompson to a three- year term. Mr. Thompson was originally
appointed to the Board in 1998 by Gov. James B. Hunt, Jr. Mr.
Thompson is a certified appraiser and real estate broker. He was
County Tax Supervisor for Surry County. He has been very active
in local civic and community affairs. He and his wife, Betty, make
their home in Elkin.
Governor Michael F. Easley has appointed John D. Lyon, Jr.
to the Board for a three- year term. Mr. Lyon graduated from the
University of North Carolina with a BA degree in political science.
He has been an appraiser for 17 years and is Certified General. He
is a real estate broker and has a great deal of experience in both res-idential
and commercial real estate. Mr. Lyon is a North Carolina
Superior Court Mediator. Mr. Lyon also serves as a member of the
North Carolina Alcoholic Beverage Control Commission. He and
his wife, Dolly, make their home in Raleigh.
Recent Board Appointments
click on Information and Application to read and use this informa-tion.
The new application is designed to be used by both applicants
using the Segmented Approach of pre 2008 education and the new
2008 Education Criteria.
Experience requirements are also explained in detail in this
information and note that the schedule for experience points has
been revised effective January 1, 2008.
The Board no longer publishes a hardcopy of the Information
and Application booklet but this information is available on the
website and may be copied for your use. The use of old publica-tions
should be discontinued as the information is not correct as
of January 1, 2008.
2
Mortgage Brokers Now Cannot Try To
Improperly Influence Appraisals
A law passed in 2007 will increase the authority of the Commissioner of Banks regarding
mortgage brokers. Currently, it is prohibited for mortgage brokers to influence or attempt
to influence the development, reporting, result, or review of a real estate appraisal sought
in connection with a mortgage loan through coercion, extortion, or bribery. A mort-gage
broker may ask an appraiser to consider additional appropriate property infor-mation,
provide further detail, substantiation, or explanation for the appraiser's value
conclusion, or to correct errors in the appraisal report.
The 2007 bill amended the existing law. Effective January 1, 2008, mortgage brokers are
prohibited from improperly influencing or attempt to improperly influence the devel-opment,
reporting, result, or review of a real estate appraisal sought in connection with
a mortgage loan.
Residential Mortgage Fraud Act
Effective December 1, 2007
A law that may have a significant effect on appraisers became effective on December 1,
2007. The Residential Mortgage Fraud Act provides that a person is guilty of residential
mortgage fraud when, for financial gain and with the intent to defraud, that person does
any of the following:
1. Knowingly makes or attempts to make any material misstatement, misrepresentation, or
omission within the mortgage lending process with the intention that a mortgage lender,
mortgage broker, borrower, or any other person or entity that is involved in the mortgage
lending process relies on it.
2. Knowingly uses or facilitates or attempts to use or facilitate the use of any misstatement,
misrepresentation, or omission within the mortgage lending process with the intention that
a mortgage lender, borrower, or any other person or entity that is involved in the mortgage
lending process relies on it.
3. Receives or attempts to receive proceeds or any other funds in connection with a residential
mortgage closing that the person knew, or should have known, resulted from a violation of
subdivision ( 1) or ( 2) of this subsection.
4. Conspires or solicits another to violate any of the above.
The mortgage lending process includes the appraisal of real property, and documents
involved in the mortgage lending process include appraisal reports. Cases are prosecuted
by the District Attorney upon referral from the Office of the Commissioner of Banks,
the North Carolina Real Estate Commission, the Attorney General, the North Carolina
Appraisal Board, or other parties.
There is no requirement to show that anyone was harmed financially in the transaction
or that anyone relied on the misrepresentation. Violation of the law is a felony and can
result in a fine and imprisonment. In addition, any real or personal property used in the
commission of mortgage fraud may be seized by the state. This can include an appraiser’s
computer equipment or even a personal residence if it is used as an appraisal office.
The new law also provides that unless someone acts with fraud, bad faith or malice, a
person can’t be sued for civil liability for filing reports or furnishing information regard-ing
suspected mortgage fraud to the Appraisal Board or any other regulatory or law
enforcement agency.
Published as a service to appraisers to promote
a better understanding of the Law, Rules and
Regulations, and proficiency in ethical apprais-al
practice. The articles published herein shall
not be reprinted or reproduced in any other
publication, without specific reference being
made to their original publication in the North
Carolina Appraisal Board Appraisereport.
NORTH CAROLINA
APPRAISAL BOARD
5830 Six Forks Road
Raleigh, North Carolina 27609
Phone: 919/ 870- 4854
Fax: 919/ 870- 4859
Website:
www. ncappraisalboard. org
Email Address:
ncab@ ncab. org
Michael F. Easley, Governor
APPRAISAL BOARD MEMBERS
Henry E. Faircloth
Chairman . . Salemburg
J. Vance Thompson
Vice- Chairman . . . . . . . Elkin
J. David Brooks . . . . Oxford
Donald S. Johnson . . . Henderson
John D. Lyon, Jr. . . . . . Raleigh
Earl M. Worsley, Jr. . . Wilmington
Larry N. Wright . . . Candler
STAFF
Philip W. Humphries, Executive Director
Roberta A. Ouellette, Legal Counsel
Donald T. Rodgers, Deputy Director
Thomas W. Lewis, III, Investigator
Jeffrey H. Davison, Investigator
Terri S. Haywood, Investigator
Jacqueline Kelty, Administrative Assistant
Deborah C. Liggins, Administrative Assistant
Pam A. Privette, Administrative Assistant
Mindy M. Sealy, Administrative Assistant
APPRAISER COUNT
( As of December 27, 2007)
Trainees . 1071
Licensed Residential 413
Certified Residential 2072
Certified General 1044
Total Number 4600
APPRAISER
EXAMINATION RESULTS
July 2007– November 2007
Examination Total Passed Failed
Trainee 315 202 113
Licensed Residential 48 45 3
Certified Residential 416 258 158
Certified General 257 120 117
Examinations are administered by a national ­testing
service. To apply for the examination, please submit
an application which may be downloaded from the
Appraisal Board’s website at http:// www. ncappraisal-board.
org/ forms/ InfoAndApp. pdf
3
The Trainee Registration Process
In order to become registered as a trainee, you must com-plete
four classes. These are: Basic Appraisal Principles,
Basic Appraisal Procedures, Residential Market Analysis
and Highest and Best Use, and the 15 hour National USPAP
course. All courses must have been completed within 5 years
of the date of application.
You must be at least 18 years of age and must have a high
school diploma or a GED. You must be a United States citi-zen
or a permanent resident to become a trainee.
Once you complete the four classes, you will file an applica-tion
with us. The application fee is $ 200.00.
You must obtain a criminal record report from Carolina
Investigative Reporting and send a copy of the results to us
with your application. You get the report online at www.
ncab. myrecordcheck. com.
After we receive your complete application, we will send
you a ticket so that you can schedule the state trainee
examination.
Once you pass the examination, we will look to see if you
have had a character issue. For those applicants who do not
have a character issue, your registered trainee number will
be assigned and mailed to you. For those applicants with a
character issue, your application must go before the Board
for approval. We do not decide whether you possess the
requisite character for registration until you have success-fully
passed the state examination.
Application Form
The application form constitutes a sworn affidavit; therefore,
you must sign it before a Notary Public.
In addition to general biographical information, the applica-tion
form requires:
1. A recent photograph of yourself;
2. A list of your previous places of
residence and employment;
3. Information pertaining to your
character and reputation;
4. Information pertaining to your
appraisal education; and;
5. The application fee of $ 200.00.
Examination
The examination is given by Person Vue ( formerly Promissor),
a private testing company. You will contact them directly to
schedule the state exam. The exam is given is several loca-tions
around the state, six days a week. The testing fee is
$ 90.00 per test.
If you do not pass the examination, you must wait 30 days
before you can take it again. You will need to pay another fee
to take it again. Your test ticket is good for one year from the
date it is issued. You can take the examination three times on
one ticket.
If you fail the test three times, or if you do not pass the exam-ination
within one year, your application is cancelled. You
must wait six months before you can file a new application.
Use of Titles
Registered Trainees must utilize only the title “ registered
trainee.” You must be actively and personally supervised by a
licensed or certified real estate appraiser.
You cannot hold yourself out as or engage in the business of
a Registered Trainee until your registration has been issued
and you have your pocket card in your possession.
Finding a Supervisor
The Appraisal Board cannot assist you in finding a supervi-sor.
Ask your instructor for more information.
2008 Board Meeting Dates
January— No meeting
February 12
March 18
April— No meeting
May 13
June 17
July— No meeting
August 12
September 16
October— No meeting
November 18
December 16
All meetings are conducted at the North
Carolina Appraisal Board building located
at 5830 Six Forks Road, Raleigh.
4
Upgrading to Certified Residential
or Certified General
In order to upgrade to Certified Residential, you must
complete the following courses in addition to the courses
required to become a trainee.
• 15 hours in Residential Appraiser Site Valuation and Cost
Approach;
• 30 hours in Residential Sales Comparison and Income
Approaches;
• 15 hours in Residential Report Writing and Case Studies;
• 15 hours in Statistics, Modeling and Finance;
• 15 hours in Advanced Residential Applications and Case
Studies; and
• 20 hours of appraisal subject matter electives.
In addition, you must have an Associate degree or higher
or must have completed twenty- one ( 21) semester credit
hours covering the following subject matter courses:
English Composition; Principles of Economics ( Micro or
Macro); Finance; Algebra, Geometry or higher mathemat-ics;
Statistics; Introduction to Computers- Word Processing/
Spreadsheets; and Business or Real Estate Law.
You must also have obtained 2500 hours of appraisal experi-ence
over a minimum of two years working under the super-vision
of a licensed or certified appraiser. At least half of your
appraisal experience must be one to four unit single- family
residential properties where the sales comparison approach
is used.
In order to upgrade to Certified General, you must complete
the following courses in addition to the courses required to
become a trainee.
• 30 hours in General Appraiser Market
Analysis and Highest and Best Use;
• 15 hours in Statistics, Modeling and Finance;
• 30 hours in General Appraiser Sales
Comparison Approach;
• 30 hours in General Appraiser Site
Valuation and Cost Approach;
• 60 hours in General Appraiser Income Approach;
• 30 hours in General Appraiser Report Writing and Case
Studies;
• 30 hours of appraisal subject matter electives.
In addition, you must have a Bachelor’s degree or must
have completed thirty ( 30) semester credit hours covering
the following subject matter courses: English Composition;
Micro Economics; Macro Economics; Finance; Algebra,
Geometry or higher mathematics; Statistics; Computer
Science; Business or Real Estate Law; and two elective courses
in accounting, geography, agricultural economics, and busi-ness
management or real estate.
You must also have obtained 3000 hours of appraisal expe-rience
over a minimum of two and one half years working
under the supervision of a certified appraiser. At least half
of your appraisal experience must have been in appraising
non- residential real estate. At least 50 percent of the non-residential
appraisal experience must have been of complex
properties or of improved properties in which the income
approach was utilized in the appraisal process.
Required Appraisal Experience
To better assure consistency and fairness in evaluating
appraisal experience, we use a point system that serves as a
guideline for evaluating experience. This point system takes
into consideration the number of appraisals you perform,
the types of appraisals performed, and the types of proper-ties
appraised.
All qualifying experience must have been obtained by per-forming
or reviewing appraisals using appraisal methods
and processes that are commonly employed by real estate
appraisers. All qualifying experience must comply with
USPAP.
All experience must have been obtained within the five ( 5)
year period immediately preceding the date of examination.
You must keep a log of all appraisals you perform.
You may receive experience credit for appraisals where you
perform at least 75% of the work on the appraisal. Up to 50%
of your experience may be in appraisal reviews, and up to
20% may be demonstration appraisals.
Your supervisor will be able to answer questions about
appraisal experience.
5
Question: Does the expectation to have a transcript or a
summary apply only in assignments when an appraiser
provides an oral report?
Response: No. The requirements identified in the Record
Keeping section of the Ethics Rule apply to both oral
reports and testimony in an appraisal, appraisal review, or
appraisal consulting assignment.
Question: Is a transcript of an oral report or testimony
required for the workfile when an appraiser testifies about
an appraisal assignment?
Response: No. There is no absolute requirement to have
a transcript of the appraisal oral report testimony. The
Record Keeping section of the Ethics Rule requirement is
for the workfile to contain summaries ( which are typically
prepared by the appraiser) or a transcript. In cases where
summaries are retained, a transcript is not required.
Question: Does the expectation to have a transcript or
summary of testimony apply if the appraiser has a written
appraisal report and testifies only to the information con-tained
in that report?
Response: Yes. A transcript or summary of the testimony
must be included in the workfile when the appraiser testi-fies
about a written report. While the report that is the
subject of the appraiser’s testimony must also be included
in the assignment workfile, it does not replace a summary
of the testimony.
Mechanic’s Liens on Real Property For
Non- payment of Appraisal Fees
Appraisers may not place a mechanic’s lien on real property for non- payment of appraisal fees. Current law does not allow
such a lien. State law allows a mechanic’s lien for any person who performs or furnishes labor or materials pursuant to a con-tract
with the owner of real property for making an improvement thereon or for professional design or surveying services.
A lien for non- payment of appraisal fees is not allowed, since an appraisal is not an improvement to the real property. An
appraiser must file suit in court ( usually small claims court) and obtain a judgment. If the judgment is not paid, the appraiser
can then ask the court for a lien on any property owned by the judgment debtor.
There are several problems with allowing a mechanic’s lien on real property for appraisal fees. In many situations, there is no
contract with the owner of the subject property as a mortgage broker, AMC or financial institution is the appraiser’s client.
An appraisal is generally done on behalf of a financial institution in order to value collateral for a loan. The owner may not
even know that an appraisal is being performed. For example, a financial institution may be valuing its portfolio in order
to sell some loans, or may value a specific property to make a decision on foreclosure. Although in some circumstances the
property owner may get some benefit from the appraisal and may consent to the appraisal being done, this does not give rise
to a relationship that allows the placement of a lien.
State law provides that any person who files a claim of a lien on real property, knowing that the filing is not authorized by
statute, or with the intent that the filing is made for an improper purpose such as to hinder, harass, or otherwise wrongfully
interfere with any person, is guilty of a Class 1 misdemeanor.
Question: If an appraiser prepares a written appraisal
report, is the workfile required to contain a separate
signed certification for any testimony the appraiser pro-vided
in support of that report?
Response: In cases where testimony is provided about
information contained in a written appraisal, appraisal
review, or appraisal consulting report, a signed certifica-tion
is required to be included in the written report. The
requirement to include a signed certification is satisfied
by including a true copy of the report in the workfile,
consistent with the Record Keeping section of the Ethics
Rule.
Question: Must the workfile contain a transcript or
summary of an appraiser’s testimony for the entire
proceeding, or only for that portion that contains the
appraiser’s testimony?
Response: The appraiser’s workfile must contain a sum-mary
or a transcript of the appraiser’s testimony in
an appraisal, appraisal review, or appraisal consulting
assignment. The appraiser is not obligated to retain sum-maries
or transcripts for other segments of the proceed-ings
in which testimony was provided by individuals
other than the appraiser.
USPAP Q & A
6
Allen Tate School of Real Estate— A Dan Mohr School
5000 Nations Crossing Road, Suite 206
Charlotte, NC 28217
704- 362- 2296
Mfg/ Mod Homes & Real Property ( 7/ 7)
New Rules & Regs FHA/ HUD Appraisal
Requirements ( 14/ 14)
Residential Construction Seminar ( 14/ 14)
Staying Out of Trouble— NC App ( 7/ 7)
American Society of Farm Managers and Rural Appraisers
950 South Cherry Street, Suite 508
Denver, CO 80222
303- 758- 3513
16- Hr Uniform Agricultural Appraisal Report
Seminar ( 16/ 16)
8- Hr Uniform Agricultural Appraisal ( 8/ 8)
A- 25 Eminent Domain ( 19/ 19)
A- 36 Intro to Appraisal Review ( 14/ 14)
A- 370 Appraisal Review ( 22/ 21)
Advanced Appraisal Review Case Studies ( A390) ( 16/ 16)
Advanced Approaches to Value for Rural Appraisal ( 41.5/ 30)
Advanced Rural Case Studies ( 36/ 30)
Advanced Sales Confirmation & Analysis ( 8/ 8)
Appraising Agricultural Land in Transition ( 14/ 14)
Appraising Agricultural Land in Transition ( 8/ 8)
Appr Rev Under Uniform App Stnd for Fed
Land Acq ( A380) ( 16/ 16)
ASFMRA Code of Ethics ( 4/ 4)
Cost Estimating ( 8/ 8)
Dairy Facility Appraising - A Mooving Target ( 16/ 16)
Intermediate Appraoches to Value for Rural
Appraisal ( 41/ 30)
Intro to the Approaches to Value for Rural Appraisal ( 41/ 30)
National USPAP Update 2008 ( 7/ 7)
Valuation of Conservation Easements ( 33/ 30)
American Society of Appraisers, NC Chapter
121 SE 21st Street
Oak Island, NC 28465
910- 278- 7151
Appraising Small Residential Income Properties ( 7/ 7)
The Appraisal of Small Subdivisions ( 7/ 7)
AppraisalSchools by M. Curtis West
P. O. Box 947
Zebulon, NC 27597
919- 404- 5115
800- 317- 8040
Scope of Work in the Appraisal Process ( 7/ 7)
Appraisal Institute
550 W. Van Buren Street, Suite 1000
Chicago, IL 60607
312- 335- 4100
330 Apartment Appr: Cncpts & ( 14/ 14)
420 Business Practice and Ethics ( 7/ 7)
530 Adv Sales Comp & Cost Appr ( 40/ 30)
600 Inc Val of Sm Mixed- Use Prop ( 15/ 15)
610 Cst Val of Sm Mixed- Use Prop ( 15/ 15)
620 Sls Comp Val Sm Mixed- Use ( 15/ 15)
700 Appraisers as Expert Witness ( 15/ 15)
705 Litigation Appr: Spclzd Topics & ( 16/ 16)
710 Condemnation Appr: Basic Prin & ( 15/ 15)
Approved Continuing Education Courses ( As of of January 29, 2008)
Listed below are the courses approved for appraiser continuing education credit as of date shown above. Course sponsors are listed
alphabetically with their approved courses. Shown parenthetically beside each course title are sets of numbers [ for example: ( 15/ 10)]. The
first number indicates the number of actual classroom hours and the second number indicates the number of approved continuing edu-cation
credit hours. You must contact the course sponsor at the address or telephone number provided to obtain information regarding
course schedules and locations.
720 Condemnation Appr: Adv Topics & ( 15/ 15)
810 Computer- Enhanced Cash Flow Mod ( 15/ 15)
Adv Res Applctns & Case Studies ( 14/ 14)
Adv Res Report Writing Pt 2 ( 28/ 28)
An Introduction to Valuing Green Buildings ( 7/ 7)
Analytics with the Site to do Business ( 7/ 7)
Appraisal Challenges: Declining Markets & Sales ( 7/ 7)
Appraising Manufactured Housing ( 7/ 7)
Condominiums Co- Ops & PUDS ( 7/ 7)
Forecasting Revenue ( 7/ 7)
General Appraiser Income Approach Part 1 ( 27/ 27)
General Appraiser Income Approach Part 2 ( 27/ 27)
General Appraiser Report Writing & Case Studies ( 28/ 28)
Gen Appr Sales Comp Approach ( 28/ 28)
Gen Appr Site Valuation & Cost Approach ( 27/ 27)
Gen Demo Appr Rpt Writing Sem ( 7/ 7)
General Market Analysis & Highest & Best Use ( 28/ 28)
Liability Management for Residential Appraisers ( 7/ 7)
Office Bldg Valuation: A Contemporary Perspective ( 7/ 7)
O/ L 15- Hour National USPAP Equivalent Course ( 15/ 14)
O/ L 420: Business Practices & Ethics ( 8/ 7)
O/ L Analyzing Distressed Real Estate ( 4/ 4)
O/ L Analyzing Operating Expenses ( 7/ 7)
O/ L Appraisal of Nursing Facilities ( 7/ 7)
O/ L Appraising Convenience Stores ( 7/ 7)
O/ L Appraising from Blueprints ( 7/ 7)
O/ L Apartment Appraisal, Concepts & Applications ( 15/ 14)
O/ L Appraising Manufactured Housing ( 7/ 7)
O/ L Basic Appraisal Principles ( 28/ 14)
O/ L Basic Appraisal Procedures ( 28/ 14)
O/ L Condominiums, Co- Ops & PUD's ( 7/ 7)
O/ L Cool Tools: New Technology for RE Appraisers ( 7/ 7)
O/ L Eminent Domain & Condemnation ( 7/ 7)
O/ L Feasibility, Market Value, Investment Timing:
Option Value ( 7/ 7)
O/ L GIS - The Building Case Study ( 14/ 14)
O/ L GIS - The Novice Case Study ( 7/ 7)
O/ L Internet Search Strategies for R ( 7/ 7)
O/ L Intro to GIS Apps for RE App ( 7/ 7)
O/ L Intro to International Valuation Standards ( 8/ 8)
O/ L Marshall & Swift Commercial Cost Training ( 7/ 7)
O/ L Prof Guide to the FNMA 2- 4 Unit Form 1025 ( 10/ 10)
O/ L Real Estate Finance, Statistics & Valuation
Modeling ( 14/ 14)
O/ L Res Design & Functional Utility ( 7/ 7)
O/ L Res Mkt Analysis & Highest & Best Use ( 14/ 14)
O/ L Res Property Construction & In ( 7/ 7)
O/ L Residential Report Writing & Case Studies ( 14/ 14)
O/ L Res Sales Comparison & Income Approach ( 28/ 14)
O/ L Reviewing Residential Appraisals and Using
Fannie Mae forms ( 7/ 7)
O/ L Scope of Work: Expanding Your Range of Services ( 7/ 7)
O/ L Sm Hotel/ Motel Val: Lmtd S ( 7/ 7)
O/ L The FHA and the Appr Proce ( 7/ 7)
O/ L The Professional's Guide to the URAR ( 7/ 7)
O/ L Using Your HP12C Financial ( 7/ 7)
O/ L Val of Detrimental Conditions ( 7/ 7)
O/ L What Commercial Clients Would Like Appraisers
to Know ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
Quality Assurance in Residential Appraisals ( 7/ 7)
RE Finance, Stats, Valuation M ( 14/ 14)
Real Estate Investing & Development: A Valuation
Prosp ( 7/ 7)
REO Appraisal- Appraisal of Resiential Property ( 7/ 7)
Report Writing & Valuation Analysis ( 40/ 30)
Res Demo Appr Report Writing S ( 7/ 7)
Res Market Analysis & Highest and Best Use ( 14/ 14)
Residential Report Writing & Case Stud ( 14/ 14)
Reviewing Residential Appr Rpt ( 7/ 7)
Residential Sales Comparison & Income
Approaches ( 28/ 28)
Residential Site Valuation & Cost Approach ( 14/ 14)
Scope of Work: Expanding Range ( 7/ 7)
Subdivision Valuation ( 7/ 7)
Uniform Appraisal Standards for Federal Land
Acquisitions ( 16/ 15)
Valuation of Conservation Easements ( 33/ 30)
Appraisal Institute NC Chapter
3717 W. Market Street, Suite C
Greensboro, NC 27403
336- 297- 9511
Evaluating Commercial Construction ( 16/ 16)
Bob Ipock & Associates, Inc.
1218 Heatherloch Drive
Gastonia, NC 28054
704- 867- 1985
National USPAP Update 2008 ( 7/ 7)
BudBlack. net
P. O. Box 11111
Cherryville, NC 28021
800- 750- 1114
National USPAP Update 2008 ( 7/ 7)
Sales Comparison Analyses Based on Market Data ( 7/ 7)
Value? What Value? ( 4/ 4)
Career Webschool
1395 S. Marietta Pkwy., Bldg. 400, Suite 107
Marietta, GA 30067
770- 919- 9191
O/ L A URAR Form Review ( 7/ 7)
O/ L Appraisal Methods ( 14/ 14)
O/ L Overview of Appr Process ( 14/ 14)
O/ L Residential Appr Site Valuation & Cost
Approach ( 14/ 14)
O/ L Res Mkt Analysis & Highest & Best Use ( 14/ 14)
O/ L Residential Report Writing & Cases ( 14/ 14)
CCIM Institute
430 N. Michigan Avenue, 8th Floor
Chicago, IL 60611- 4092
312- 321- 4473
C1101 Financial Analysis of Commercial Invest. ( 30/ 30)
C1102 Market Analysis Comm Inv. ( 30/ 30)
C1103 User Decision Analysis Comm Inv. ( 30/ 30)
C1104 Invest Analysis Comm Inv. ( 30/ 30)
Intro to Com Investment RE An ( 12/ 12)
Columbia Institute ( The)
8546 Broadway, Suite 165
San Antonio, TX 78217
800- 460- 3147
FHA, the URAR & the 1025, No. 104 ( 8/ 8)
Fundamentals of Appraisal Review No. 105 ( 8/ 8)
National USPAP Update 2008 ( 7/ 7)
O/ L Residential Report Writing & Case Studies ( 14/ 14)
O/ L URAR Form Review ( 7/ 7)
Scope of Work & Appraiser Due Diligence ( 4/ 4)
7
Survey of the Cost Approach ( 8/ 8)
Creative Education
PO Box 640
Alexis, NC 28006
704- 867- 0485
O/ L The Cost Approach ( 7/ 7)
O/ L The Income Approach ( 7/ 7)
O/ L The Sales Comparison Approach ( 7/ 7)
Dan Mohr Real Estate Schools
1400 Battleground Avenue, Suite 150
Greensboro, NC 27408
800- 639- 9813
Depreciation Workshop ( 7/ 7)
Environmental Hazards- Res Prop ( 7/ 7)
Extraction of Data from Market Res ( 7/ 7)
HP 12C Course ( 7/ 7)
Intro to Residential Construction ( 30/ 30)
Mfg/ Mod Homes & Real Prop App ( 7/ 7)
Res Appr & Conv Underwriting Guide ( 7/ 7)
Residential Construction Cost ( 7/ 7)
Residential Construction Seminar ( 14/ 14)
Rules & Regs FHA/ HUD Rqrmnt ( 14/ 14)
Staying Out of Trouble— NC App ( 7/ 7)
The Narrative Appraisal Report ( 7/ 7)
Dynasty School
2373 S. Hacienda Boulevard
Hacienda Heights, CA 91745
800- 888- 8827
O/ L Real Estate Appraisal ( 14/ 14)
O/ L Residential Report Writing ( 15/ 15)
Edgecombe Community College
225 Tarboro Street
Rocky Mount, NC 27801
252- 446- 0436
Appr Mfg, Mod & Mobile ( A) ( 7/ 7)
Appr Mfg, Mod & Mobile ( B) ( 7/ 7)
Cst Appr Marshall & Swift Res & Co ( 7/ 7)
Income Capitalization ( 14/ 14)
Income Capitalization ( A) ( 7/ 7)
Income Capitalization ( B) ( 7/ 7)
Mfg, Modular & Mobile ( 4/ 4)
Narrative Appraisal Report Writing ( 14/ 14)
New FNMA Forms— Multifamily ( 7/ 7)
New FNMA Forms— Single Family ( 7/ 7)
Pricing Small Income Properties ( 4/ 4)
Principles & Techniques Val 2- 4 Units Res Prop ( 14/ 14)
Principles & Techniques for Determining
Market Adjustments ( 7/ 7)
RE Finance for Appraisers ( 14/ 14)
Rural Valuation Seminar ( 14/ 14)
Single Fam Res App ( 14/ 14)
Standards of Professional Practice ( 15/ 15)
USPAP & NC Board Rules & Regs for ( 15/ 15)
Hignite Training Service
208 Gloria Street
Greenville, NC 28328
866- 444- 6483
Advisory Opinions in Depth ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
Institute of Government, UNC, Chapel Hill
Knapp Building, CB# 3330
Chapel Hill, NC 27599- 3330
919- 966- 4157
Assessment Administration ( 30/ 7)
IAAO 101: Fundamentals of Real Property ( 30/ 30)
IAAO 102: Income Approach to Valuation ( 30/ 30)
IAAO 311: Residential Modeling Concepts ( 30/ 30)
IAAO 402: Property Tax Policy ( 30/ 30)
JVI
951 Market Promenade Avenue
Lake Mary, FL 32746
407- 531- 5333
Appraising REO Properties ( 7/ 7)
O/ L JVI Appraising Residential REO Properties ( 6/ 6)
McKissock Appraisal Schools
P. O. Box 1673
Warren, PA 16365
800- 328- 2008
Appraising REO & Foreclosure Properties ( 7/ 7)
Even Odder: More Oddball Appraisals ( 7/ 7)
Mortgage Fraud: Protect Yourself ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
O/ L 2- 4 Family Finesse ( 7/ 7)
O/ L Appr for the Secondary Market ( 7/ 7)
O/ L Appraisal Trends ( 7/ 7)
O/ L Appraiser Liability ( 7/ 7)
O/ L Appraising FHA Today ( 7/ 7)
O/ L Appraising Historic Properties ( 4/ 4)
O/ L Appraising the Oddball ( 7/ 7)
O/ L Art of Residential Appraisal ( 7/ 7)
O/ L Construction Details & Trends ( 7/ 7)
O/ L Environmental Issues for Appraisers ( 5/ 5)
O/ L Even Odder: More Odd ( 7/ 7)
O/ L Made in America ( 7/ 7)
O/ L Private Appraisal Assignments ( 7/ 7)
O/ L Relocation Appraisal is Dif ( 7/ 7)
O/ L Technology for Todays Appraiser ( 5/ 5)
O/ L The Cost Approach ( 7/ 7)
O/ L The Evolution of Finance and the
Mortgage Market ( 4/ 4)
Relocation Appraisal is Differ ( 7/ 7)
Mel Black/ NCREEI
P. O. Box 7
Gastonia, NC 28053
704- 864- 1711
2- 4 Family Properties ( 7/ 7)
Appraisal Case Law ( 7/ 7)
Appraisal Case Law II ( 7/ 7)
Board Rules and Laws ( 7/ 7)
Exam Prep for Appraisers ( 14/ 14)
FHA & VA Appraiser: Thriving & Surviving ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
O/ L FHA & VA Appraisal Basics ( 7/ 7)
O/ L Income Approach ( 7/ 7)
O/ L Intro to Commercial Appraisal ( 3.5/ 3.5)
O/ L Mortgage Fraud: A Dangerous Business ( 7/ 7)
O/ L Residential Cost Approach ( 7/ 7)
O/ L Sales Comparison Approach ( 7/ 7)
Reviewing Apprs on New FM Form ( 4/ 4)
Sales Comp Analy Based on Mk ( 7/ 7)
Technical Writing for Appraisers ( 7/ 7)
Trainees & Supervisors ( 7/ 7)
Mingle School of Real Estate
P. O. Box 35511
Charlotte, NC 28235
704- 372- 2984
O/ L Residential Cost Approach ( 7/ 7)
O/ L Sales Comparison Approach ( 7/ 7)
O/ L The Income Approach ( 7/ 7)
Surry Community College
P. O. Box 304
Dobson, NC 27017
336- 386- 8121
Fannie Mae Updated Property & Appr Guidelines ( 8/ 8)
Home Inspections & Common De ( 4/ 4)
Is the Comparable Comparable ( 8/ 8)
Mobile Mfg Homes & Types of M ( 4/ 4)
Prep 2- 4 Sm Resid Income Prop Appr Rpt ( 8/ 8)
Preparation of a Quality URAR ( 8/ 8)
Reviewing a Residential Appraisal ( 8/ 8)
Scope of work ( 7/ 7)
Testing Highest & Best Use ( 8/ 8)
Triangle Appraisal & Real Estate School
2801- 3V Ward Boulevard
Wilson, NC 27693
252- 291- 1200 or 919- 971- 1887
Manufactured Home Construction ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
North Carolina Rules ( 7/ 7)
The Cost Approach & Insurable Interest ( 7/ 7)
Wachovia Appraisal Training
4101 Wiseman Boulevard
San Antonio, TX 78251
210- 543- 5338
Appraisal Review 2 ( 8/ 8)
Appraising in a Changing Market ( 4/ 4)
Appraising the High End Home ( 8/ 8)
National USPAP Update 2008 ( 7/ 7)
Wendell Hahn & Associates
PO Box 5245
Columbia, SC 29250
803- 779- 4721
Appraisal Update 2007 ( 7/ 7)
FHA Appraisal Update ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
New FNMA Forms ( 7/ 7)
Property Inspection for Appraisers ( 7/ 7)
Residential Case Studies ( 7/ 7)
Six Critical Problems that Appraisers Face ( 7/ 7)
Worldwide Employee Relocation Council
1717 Pennsylvania Ave. NW # 800
Washington, DC 20006- 4665
202- 857- 0857
O/ L The Relocation Appr Training Program ( 6/ 6)
8
The following is a summary of recent disciplinary actions taken by
the Appraisal Board. This is only a summary; for brevity, some of the
facts and conclusions may have not been included. Because these are
summaries only, and because each case is unique, these summaries
should not be relied on as precedent as to how similar cases may be
handled.
Disciplinary Actions
Catherine Alexander A5734 ( Cornelius)
By consent, the Board issued a reprimand to Ms. Alexander and ordered her to
take a course in sales comparison and a course in appraising manufactured or fac-tory
built homes by December 1, 2007. If she fails to take these courses by that date,
the reprimand will be vacated and a one- month active suspension will be imposed
on December 1, 2007. The Board alleged that Ms. Alexander appraised a property
located in Davidson, North Carolina in August 2005, finding an appraised value of
$ 350,000. The subject property is a 1.5 story modular home containing 2427 square
feet. It was built in 2002, and it is located on a 2- acre site. Ms. Alexander did not
note in the report that the subject dwelling is modular construction. In the Sales
Comparison Approach, Ms. Alexander selected properties that were stick built for
comparison. There were few sales of modular homes in the area. Ms. Alexander
should have made location adjustments to her comparable sales.
Dawn M. Cook T1527 ( Durham)
By consent, the Board suspended Ms. Cook’s trainee registration for a period of one
month, which is stayed until June 30, 2008. If she takes courses in sales comparison
and in appraising difficult properties by that date, the suspension will be inactive.
The Board alleged that Ms. Cook appraised a property located in Durham, North
Carolina in May 2006, finding a value of $ 650,000. The subject property is a two-story
farmhouse built in 1980. It is located on a site consisting of 34.37 acres. The
property was appraised subject to it being located on 4.5 acres of the total acreage.
The subject has an in ground pool that is enclosed within the dwelling. The pool
area contains approximately 350 square feet. The area of the pool was included in the
total gross living area, which brought the calculated square footage for the subject to
3762. In the sales comparison approach, adjustments were made to the sales based
on the subject containing 3762 square feet, and there were adjustments of negative
$ 5000 made to the comparable sales for the lack of a pool. In the cost approach,
the entire square footage, including the pool area, was valued at $ 100 a square foot.
The subject dwelling and outbuildings were in various stages of completion and
repair. Adjustments were made to the comparable sales for the differences in condi-tion
compared to the subject. The third comparable sale sold for $ 1,895,000. This
sale required adjustments of $ 1,135,900 and should have been accompanied by more
explanation.
Michael J. Daly A4943 ( Kitty Hawk)
By consent, the Board issued a reprimand to Mr. Daly and ordered him to take a
course in the sales comparison approach and a course in the income approach by
June 1, 2008. If he fails to do so, a three month suspension will be activated on that
date. The Board alleged that Mr. Daly appraised a property located in Nags Head,
North Carolina in August 2005, finding a value of $ 580,000. The subject property is
an oceanfront beach house containing 1812 square feet. Mr. Daly used four compa-rables
in his sales comparison approach. One of the sales had a fireplace and board-walk
to beach that were not noted or adjusted for. Although the subject and most of
the properties in this area were used as rentals, Mr. Daly did not utilize the Income
Approach and could have include more information in the report to support his
conclusion that the Income Approach was not applicable or necessary. Mr. Daly
also appraised a property located in Kill Devil Hills, North Carolina in August 2005,
finding a value of $ 270,000. This property is a beach box style home on pilings, with
960 square feet. Mr. Daly did not develop the income approach on this property,
although he did include a rental addendum and an operating income statement in
the report. The operating income reconciliation included in the report did not take
into account monthly housing expense.
Peter J. Gallo A5849 ( Charlotte)
By consent, the Board suspended Mr. Gallo’s residential certification for a period
of one month. Mr. Gallo also agrees to complete a course in sales comparison, a
course in appraising manufactured or factory built housing and the 15 hour National
USPAP course. If he fails to complete the courses, he will be suspended for an addi-tional
eleven months. The Board alleged that Mr. Gallo appraised a property located
in Charlotte, North Carolina in May 2005, finding an appraised value of $ 115,000.
For comparable sales, Mr. Gallo selected three stick built properties and two manu-factured/
modular homes from other areas. He made negative adjustments to his
comparable sales for the differences. Although Mr. Gallo signed a certification that
he had inspected the exterior of his comparable sales, he did not do so.
William D. Graves, III A4133 ( Oriental)
By consent, the Board suspended Mr. Graves’ residential certification for a period
of one month. Mr. Graves must also complete courses in sales comparison, the cost
approach and the valuation of vacant land. If he fails to take the courses, he will
receive an additional three month suspension. The Board alleged that Mr. Graves
appraised four properties located in Pamlico County, North Carolina in October
2005. The first subject property consists of a 560 square foot cottage built in 1933
located on a .10- acre lot fronting on a river. Mr. Graves valued the subject at
$ 148,000 as of October 20, 2005. The appraisal was reported on a Land Appraisal
Report form. The dwelling was noted as a structure but given no value. The com-parable
lot sales are all larger and adjustments were made for this fact. The second
subject property is a 1.39 acre vacant lot bordering the river. Mr. Graves valued the
subject at $ 233,000 as of October 18, 2005.
The original appraisal report did not mention that there is a 100- foot wide perma-nent
access easement from the road to the river deeded to the lot across the street
from the subject. After this was pointed out to the Mr. Graves, he changed the value
to $ 175,000 in May 2006 to reflect the easement. The third subject property is a .46
vacant lot in a riverside neighborhood, located across the street from the river lots.
The property was valued at $ 67,000 as of October 18, 2005. The fourth subject prop-erty
is a .46 acre vacant lot located on a corner with canal access. The property was
valued at $ 82,000 as of October 20, 2005. Mr. Graves did not note in this report that
has an access easement for a neighbor, a drainage easement, and a CAMA setback.
He made a positive adjustment of $ 15,000 because the subject had a boat shed, bulk
head, canal frontage, and access to the river. The highest and best use was stated
as “ present use” on all four appraisal reports. The intended use and purpose of the
appraisal was not stated on any of the reports.
Donald Haynes A2696 ( Dallas)
By consent, the Board suspended Mr. Haynes’ general certification for a period
of two years. If Mr. Haynes completes a course in sales comparison, a course in
appraising complex properties and a course in highest and best use, only the first
twelve months of the suspension will be active. The Board alleged that Mr. Haynes
appraised a property located in Leland, North Carolina in November 2005, find-ing
an appraised value of $ 70,100,000. The subject property constitutes multiple
tracts of land totaling 2,200 acres that is situated adjacent to an industrial park. The
purpose of the appraisal was to determine market value of the subject property in
connection with the possible sale of the subject. Mr. Haynes described the report as
a “ complete narrative” and does not indicate whether the report is self- contained,
summary, or restricted. On the effective date of the report, the subject was under
contract for $ 38,500,000. This was not mentioned or analyzed in the report. Mr.
Haynes determined that the highest and best use of the subject property was multi-use,
incorporating both residential and commercial uses. He divided the tract into
a residential area and a commercial/ manufacturing area. His comparable sales were
all much smaller in size than the subject and did not share the same highest and best
use. Mr. Haynes made minimal adjustments to the sales for these factors. By failing
to make appropriate adjustments, he over valued the subject property. There were
other sales available that would have led to a lower value for the subject property.
Teri A. Hoke A4201 ( Mount Holly)
By consent, the Board suspended Ms. Hoke’s residential certification for a period of
six months. The first month of the suspension is active and the remainder is stayed
until July 1, 2008. If Ms. Hoke completes a course in appraising modular homes
and a course in appraiser liability by that date, the remainder of the suspension
will be inactive. In addition, Ms. Hoke agrees to not perform any appraisal services
that involve the development and subsequent reporting of her opinion of value for
a period of twelve months from the date of the consent order. Ms. Hoke will only
serve in a review capacity under the direct supervision of a manager. Ms. Hoke per-formed
an appraisal of a property located in Rockwell, North Carolina in September
2002, finding an appraised value of $ 385,000. The appraisal was performed per plans
and specifications. The subject property was a proposed modular dwelling to be
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9
located on a 2 acre site. Ms. Hoke did not note in the report that the subject was
modular. The Board alleged that the sales she used were superior to the subject in
location and appeal, and she made inadequate adjustments for these factors. There
were other sales available that were more comparable to the subject property.
Robert Katen T4002 ( Raleigh)
By consent, the Board suspended Mr. Katen’s trainee registration for a period of
three months. The suspension is stayed until March 1, 2008. If Mr. Katen com-pletes
a course in appraiser liability and a course in sales comparison by that date,
the suspension will be inactive. The Board alleged that Mr. Katen, working under
the supervision of a certified residential appraiser, appraised a property located in
Durham, North Carolina in August 2006, finding an appraised value of $ 135,000.
The appraisal reported the GLA as 1540 square feet, when it was actually closer to
1270 square feet. Mr. Katen and his supervisor were using a rain- damaged sketch
when they prepared the appraisal report, so they could not read some of their mea-surements.
In addition, they included a small amount of unfinished/ unheated area
in their GLA. As a result of miscalculating the subject’s GLA, Mr. Katen and his
supervisor chose comparable sales that ranged in GLA from 1470 to 1650 square
feet. This resulted in an inflated value for the subject property. The seller had pur-chased
the property for $ 58,000 in July 2006, and subsequently made over $ 30,000
in repairs and renovations to it. Mr. Katen and his supervisor did not report this
sale in their report.
Roger Knox A5155 ( Winterville)
By consent, the Board suspended Mr. Knox’s residential certification for a period of
one year. The first six months of the suspension is active and the remainder is stayed
until April 1, 2008. If Mr. Knox completes a course in highest and best use and a
course in the valuation of detrimental conditions by that date, the remainder of the
suspension will be inactive. The Board alleged that Mr. Knox appraised a property
located in Emerald Isle, North Carolina in June 2006, finding an appraised value of
$ 900,000. The subject property is one half of an oceanfront duplex that had been
turned into a condo. It has 2405 square feet, was built in 1985, and had an effective
age of 10. It is located on a nonconforming ocean front beach lot. The majority of
the dwelling is located between the vegetation line and the surf. If it were destroyed,
it could not be rebuilt with the setbacks and restrictions in place at the time of the
appraisal. On the effective date of the appraisal, both units were listed for sale as one
property for $ 1,250,000, but this information was not noted in the appraisal report.
Mr. Knox inserted the contract price in this section. His comparable sales are all
located on superior lots ( conforming) but no adjustments were made. The subject is
a rental property, but the income approach was not developed and no explanation
was given. Although the subject lot was in the nonconforming area of the beach,
Mr. Knox made no adjustment for this fact to his comparable sales. There were sales
more similar to the subject that would indicate a lower value for the subject prop-erty.
By failing to make adjustments in the sales comparison approach for the fact
that the property was nonconforming, and by failing to choose sales that were more
comparable to the subject, Mr. Knox over valued the subject property.
Justin D. Loeback A5380 ( Raleigh)
By consent, the Board suspended Mr. Loeback’s residential license for a period of
six months. The first two months of the suspension shall be active and the remain-der
stayed until March 1, 2008. If Mr. Loeback completes a course in sales com-parison
and the 15 hour National USPAP course by March 1, 2008, the remainder of
the suspension will be inactive. The Board alleged that Mr. Loeback performed an
appraisal of a property located in High Point, North Carolina in September 2005,
finding an appraised value of $ 115,000. The subject is a 1071 square foot, one- story
house with six rooms including three bedrooms and one bath. All of the compa-rables
used in the report were superior to the subject in location and appeal, yet Mr.
Loeback made inadequate adjustments for the differences. There were other sales
available that would have led to a lower value for the subject property. Mr. Loeback
overvalued the subject property.
John P. McPherson, Sr. A2017 ( Pinehurst)
The Board accepted the voluntary surrender of Mr. McPherson’s general
certification.
Joseph F. Moore A2655 ( Asheville)
By consent, the Board suspended Mr. Moore’s general certification for a period of
two months. Mr. Moore also agrees to complete a course in a course in the income
approach and a course in the cost approach by April 30, 2008. If he fails to com-plete
these courses by that date, the two- month suspension will be extended until
he successfully complete the courses. The Board alleged that Mr. Moore was one of
two appraisers who signed two appraisals of a proposed veterinary clinic located
in Henderson, North Carolina in 2004. The first report was performed effective
January 23, 2004, with a value of $ 460,000, for the purchase of the property. The
report utilized a hypothetical condition that the subject was being appraised as
though vacant and the appraisers gave no value to the existing improvements. This
hypothetical condition was not adequately stated in the report. The second report
was performed effective May 25, 2004, with a value of $ 1,020,000, subject to the
construction of a veterinary clinic. The appraisers used the income approach to
value as there was sufficient data to credibly develop an opinion with this approach.
The appraisers considered the cost approach to value and found it applicable but
not necessary.
In the income approach to value on the second report, the appraisers used a capi-talization
rate of 7.4%. The rate was derived using a web- based national data service
as a source for the cap. rate. The capitalization rate used in the appraisal was inap-propriate
for the market area and was too low.
David C. Norris A6051 ( Wake Forest)
By consent, the Board suspended Mr. Norris’ residential certification for a period
of one month. Mr. Norris must also complete courses in sales comparison, the cost
approach, and the 15 hour National USPAP course with exam. If he fails to com-plete
the courses, he will receive an additional eleven month suspension. There were
two cases against Mr. Norris. In the first case, the Board alleged that Mr. Norris
appraised a property located in Raleigh, North Carolina in April 2006. The subject
property is a contemporary 2 story that was built in 1973 and renovated in 2004. It
contains 2077 square feet and in located on a .16 acre site. The property had sold
in June 2004 for $ 252,000. It sold again in November 2005 for $ 405,000 after sig-nificant
renovations. It was listed for sale for $ 410,000 from December 2004 until
October 2005. Mr. Norris first appraised the property in April 2006, finding a value
of $ 580,000. No client was shown on the report. He appraised it again, in a report
also dated April 11, 2006. A client and borrower are indicated on the report. This
report shows a contract price of $ 496,000 with contract date of April 17, 2006. The
report also found a value of $ 580,000. The third appraisal was dated July 26, 2006.
This report is identical to the other two reports, with the addition of one sale that
closed in 2006. The appraised value is $ 585,000. On all three reports, Mr. Norris did
not report the complete 3- year sales history, just the most recent sale. There were
other sales in the subject’s immediate area that he should have considered in these
reports. In the second case, the Board alleged that Mr. Norris completed a total
of four appraisals on a property located in Raleigh, North Carolina. The subject
property is a one and a half- story home that contains 1870 square feet and has a
992 square foot basement. It is located on a .4- acre lot in an area of a city that is in
transition. The first report was done effective January 17, 2006, finding an appraised
value of $ 500,000. On the effective date of the appraisal, the subject was listed for
sale for $ 389,900. The report noted the fact that the subject was offered for sale, but
did not include the listing price. The second report was done effective March 27,
2006, finding an appraised value of $ 500,000. Mr. Norris noted on the report that
the subject sold for $ 378,000 on March 17, 2006. Otherwise, this report is identical
to the first report, with the addition of the cost approach. Mr. Norris considered but
did not use a similar property on the same street that sold for $ 385,000 in February
2006. The third report was done effective June 1, 2006, finding an appraised value of
$ 500,000. The subject sold in April 2006 for $ 410,000. This report is a clone of the
second report. There was a more recent sale that could have been used in the report.
That property sold in March 2006 for $ 409,000. The fourth report was done in July
2006, and the appraised value is $ 510,000. This report has three additional sales that
closed in February 2006 and June 2006. In this report, Mr. Norris increased the
costs in his cost approach due to what he termed as his re- evaluation of costs. The
March and April 2006 sales of the subject are noted. On all four reports, there were
other sales in the subject’s immediate area that Mr. Norris should have considered.
Jane H. Payne A4861 ( Sherrill’s Ford)
By consent, the Board suspended Ms. Payne’s residential certification for a period
of six months. The first two months of the suspension are active and the remainder
is stayed until March 1, 2008. If Ms. Payne completes a course in sales compari-son,
a course in appraising the oddball and the 15 hour National USPAP course by
that date, the remainder of the suspension will be inactive. The Board alleged that
Ms. Payne appraised a property located in Statesville, North Carolina in May 2002,
finding an estimate of value of $ 241,000. The subject property is a brick ranch that
has a 624 square feet addition. It is located on a .31 acre site that is improved with
an in ground pool, extensive brick fence, covered brick patio, 2- car carport, and
— continued on next page
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10
pool house. With the addition, the subject is substantially larger than the homes
in the subject subdivision. The amenities are also not typical for the subdivision.
Ms. Payne chose comparable sales from outside the subject subdivision. These sales,
although similar in size and room count to the subject, were located in superior
areas and were superior in amenity appeal and quality of construction, and she
made inadequate adjustments for these factors. There were other sales available that
would have led to a lower value for the subject property.
Terry Poole A6100 ( Raleigh)
By consent, the Board suspended Mr. Poole’s residential certification for a period of
three months. The suspension is stayed until March 1, 2008. If Mr. Poole completes
a course in appraiser liability and a course in sales comparison by that date, the
suspension will be inactive. The Board alleged that Mr. Poole and a trainee work-ing
under his supervision appraised a property located in Durham, North Carolina
in August 2006, finding an appraised value of $ 135,000. The appraisal reported
the GLA as 1540 square feet, when it was actually closer to 1270 square feet. Mr.
Poole and his trainee were using a rain- damaged sketch when they prepared the
appraisal report, so they could not read some of their measurements. In addition,
they included a small amount of unfinished/ unheated area in their GLA. As a result
of miscalculating the subject’s GLA, Mr. Poole and his trainee chose comparable
sales that ranged in GLA from 1470 to 1650 square feet. This resulted in an inflated
value for the subject property. The seller had purchased the property for $ 58,000 in
July 2006, and subsequently made over $ 30,000 in repairs and renovations to it. Mr.
Poole and his trainee did not report this sale in their report.
Regina Reaves A4668 ( Wilmington)
By consent, the Board suspended Ms. Reaves’ residential certification for a period
of for a period of one year. The first three months of the suspension are active and
the remainder is stayed until June 1, 2008. If Ms. Reaves completes a course in sales
comparison and a course in appraiser liability by that date, the remainder of the
suspension will be inactive. The board alleged that Ms. Reaves appraised a property
located in Dunn, North Carolina in October 2006, November 2006 and February
2007, each time finding a value of $ 90,000. The subject is an 1197 square foot, one-story
house with five rooms including 3 bedrooms and 2 baths. In October 2006,
the subject was listed for sale for $ 49,900 and was under contract for $ 45,500. This
report was performed subject to completion of repairs. The sales contract and list-ing
information were noted in both the October and November reports. The subject
sold on January 26, 2007 for $ 45,500, and was under contract for $ 90,000 on the
effective date of February 2007 appraisal, which was noted in the report. Ms. Reaves
the same four comparable sales in all three reports. All of the comparables were
newer and were from superior areas. There were other sales that were more compa-rable
to the subject that would have led to a lower appraised value.
Ralphele Reels A4747 ( Durham)
By consent, the Board suspended Mr. Reels’ residential certification for a period of
two years. Mr. Reels must also complete a course in the sales comparison approach
and a course in appraiser liability before the end of the suspension. If he fails to com-plete
these courses by the end of the suspension, the suspension will be extended
until he successfully complete the courses. The Board alleged that Mr. Reels per-formed
an appraisal of two properties both located in Raleigh, North Carolina
in May 2003, valuing each property at $ 345,000. Both of the properties were new
homes. Mr. Reels stated that one property was under contract for $ 329,000 and the
other was under contract for $ 324,900. The contracts in the work files indicated that
each subject was actually under contract for $ 345,000. The subject properties were
not listed for sale on the effective date of the appraisals. Mr. Reels used the same
three comparable sales in both reports. The properties did transfer as stated in the
appraisal, but it appears that these sales may not have been arms length transac-tions.
They were sales directly from the builder to the purchasers, and they had been
marketed for various prices prior to their sales. There were other sales available in
the subject neighborhood that could have led to a lower value for the subject prop-erty.
John T. Rogers, IV A3270 ( Wake Forest)
By consent, the Board suspended Mr. Rogers’ residential certification for a period
of twelve months. The first month of the suspension is active and the remainder is
stayed until May 1, 2008. If Mr. Rogers completes a course in the appraiser liability
and a course in the sales comparison approach before that date, the remainder of the
suspension will be inactive. Mr. Rogers agrees that he will not supervise any trainees
for five years. Before he does supervise trainees, he must take the Board’s supervi-sor
course. He also agrees that he will not perform any appraisals of manufactured
housing for five years and that he will complete a course in the appraisal of manu-factured
housing before he does perform any such appraisals. The Board alleged that
Mr. Rogers and a trainee performed an appraisal of a property located in Henderson,
NC in February 2002, finding an appraised value of $ 112,000. The subject property
is a 1390 square foot manufactured dwelling built in 2000. The report had the wrong
owner’s name on it. The land had transferred through foreclosure on April 25, 2001
for $ 72,000, but this information was not reported in the appraisal report. One of
the comparable sales could not be confirmed in public records, and may have been
a land/ home package. There were limited sales available, but there were some other
sales that would have indicated a slightly lower value for the subject property.
Leon Schearer A2806 ( Chapel Hill)
By consent, the Board suspended Mr. Schearer’s residential certification for a period
of six months. The first three months of the suspension are active and the remainder
is stayed until July 1, 2008. If Mr. Schearer completes a course in the sales compari-son
approach and a course in the cost approach before April 1, 2008, the remainder
of the suspension will be inactive. Mr. Scheaeer performed three appraisals of a
property located in Raleigh, North Carolina. The Board alleged that the first report
was performed “ subject to completion per plans and specifications”. It was per-formed
in August 2004 and indicated a value of $ 518,000. The second report was
performed “ subject to repairs”. It was performed in May 2005 and indicated a value
of $ 660,500. The final report was performed “ as is”. It was performed in September
2005 and indicated a value of $ 690,900. The dwelling was originally built as a one
and one half story frame dwelling on a crawl space foundation. There was an addi-tion
to the first floor of the original dwelling that contained a new master bedroom,
bath, laundry, deck and porch. Other additions and remodeling was performed.
The in- ground pool was remodeled with extensive stonework. At the time of all
three inspections, the original portion of the dwelling had not been remodeled and
was in average condition. The addition and remodeled kitchen used good quality
materials. Mr. Schearer used a cost per square foot for the reproduction cost new
of the garage in the second and third reports that was too high. His adjustments
to his sales for the room above the garage were inconsistent among the reports.
Although the third appraisal was performed “ as is” and states that the dwelling has a
“ completely renovated interior and exterior”, in fact about half of the subject had not
been remodeled. Mr. Schearer indicated an “ as is” value of the site improvements in
the first report at $ 18,500 and $ 60,000 in the second and third reports, even though
the first report was done subject to completion of renovations to the pool. He used
several sales on all three reports. He made inconsistent adjustments to his sales
between his reports, and failed to report prior sales of the subject on one of his sales.
Many of his adjustments were too low; had appropriate adjustments been made, his
appraised values would have been lower on his second and third reports.
Donald E. Spake A2890 ( Hickory)
By consent, the Board suspended Mr. Spake’s general certification for a period of
two years. If Mr. Spake completes the 15 hour National USPAP course with exam
and a course in business practices and ethics, only the first year of the suspension
shall be active. Mr. Spake also agrees that he will no longer perform any condemna-tion
appraisals or any appraisals for litigation purposes. He further agrees that he
will not serve as a consultant on any appraisal assignment, and he will not appear
as an expert witness for court or administrative agency testimony related to a real
estate appraisal or to the value of identified property. There were a total of three
cases against Mr. Spake. In the first two cases, the Board alleged that Mr. Spake
appraised a property located in Conover, NC. The city had filed a condemnation
action against the property owner for the acquisition of a permanent easement of
a portion of the tract for the establishment of a forced main sanitary sewer line. In
the appraisal process, Mr. Spake utilized an after value study prepared by another
appraiser. He was unfamiliar with the properties utilized in the study, and he did
not utilize the study in an appropriate manner. The taking consisted of .320 acres of
permanent easement for the construction, maintenance, reconstruction, enlarge-ment,
inspection, and use for a forced main sewer line. The appraisal report did not
provide an adequate description of the subject property in the before condition in
his appraisal report. Mr. Spake did not address the topography or the flood plain.
He also did not address the fact that a creek dissects the subject, and there is no
bridge from one side of the creek to the other. Mr. Spake stated that in the before
condition, the highest and best use of the 5.11 acre tract would be the development
of upper scale residential homes that would enjoy the proximity to a country club,
and especially the view of the golf course afforded the subject property. In order to
develop this property in the before condition in this manner, the property owner
would have to construct a bridge over the creek, build a lengthy driveway, and do
extensive site preparation. None of this was discussed in the highest and best use
— continued from previous page
— continued on next page
11
analysis in the before condition. Development of this property in this fashion would
not be financially feasible, and may not be physically possible Mr. Spake valued the
16.30 acres in the before condition at $ 10,384 an acre, for a total of $ 169,000. He used
five sales in his sales comparison approach. Two of those sales were improved at the
time of sale, but he made no adjustment to those sales for the improvements. All five
sales represented a transfer from their respective owners to the adjacent property
owner and were not arms length transactions due to the motivation of the buyer. In
the after value, Mr. Spake first applied his before value to the land to be acquired,
and valued the taking at $ 3,322 ( 13,936 square feet at $. 2384 per square foot). He then
treated the permanent easement as if it were a “ wall” across the subject property
that would preclude the construction of a bridge to connect the northern part with
the southern part of subject property. Mr. Spake assigned 50% in damages to the
entire property rather than just the 5.11 acres of what was considered developable
property in the before condition, even though the report does not specify a change
in the remainder’s highest and best use. He based that 50% damage amount from
two after value studies. One was the report prepared by the other appraiser, and one
he prepared himself. Using the study from the other appraiser, Mr. Spake delivered
a range from 25% to 84% between variously impaired properties as compared to
unimpaired properties, settling on a damage factor of 50%. The study he performed
indicated a percentage range of 34% to 64% divergence in value between properties
with impaired access versus properties with unimpaired access. Mr. Spake applied
this 50% damage factor to his after value of $ 165,678, resulting in $ 82,839 in dam-ages
to the remainder. The application of a 50% damage factor to the entire property
in the after value was inappropriate and unsupported. Mr. Spake applied damages
to the entire property regardless of whether or not access was available, which was
inconsistent with his methodology.
In the third case, the Board alleged that Mr. Spake appraised a property in Conover,
North Carolina. The effective date of the subject report is the date of taking, which
was September 10, 2001. The appraisal was performed in April 2006. The subject
property is a 3.35- acre tract of land improved with a 45- year- old single- family
dwelling and ancillary improvements. The property was subject to a condemna-tion
action initiated by the NCDOT that involved the acquisition of a permanent
right of way of a portion of the subject property. The purpose of the acquisition was
for lane creation in order to widen a road that abuts the subject property along its
eastern boundary. The taking is essentially a 32- foot wide strip that parallels the
eastern boundary of the subject property. Mr. Spake’s estimate of the before value
was $ 575,000. He concluded that the highest and best use of the subject property
before the taking would be to convert subject dwelling into a general office or medi-cal
office. He used commercial sales from within the immediate market area of the
subject property and determined a vacant land value of $ 436,000. The single- family
dwelling located on the subject property provided utility for the current owners, but
would have to be razed or converted to a commercial use for the subject to attain
its highest and best use as indicated by Mr. Spake. Mr. Spake, however, gave the
improvements their full depreciated value in his analysis without the application
of obsolescence. This violates the principle of consistent use. In his cost approach,
Mr. Spake contends that the depreciated reproduction cost of the totality of the
improvements would be $ 139,053.19. He then added the commercial value of the
land ($ 436,000) to the residential value of the improvements to obtain a total before
value in the cost approach. Mr. Spake’s election to apply a commercial value to the
before land value and then a residential value to the improvements without the
application of obsolescence or a cost of conversion resulted in an inappropriate and
misleading before value of the subject property. Mr. Spake reported that the value of
the subject property after the taking was $ 339,447. The difference in the before and
after value of the subject property, in his opinion, was $ 235,553. He applied a land
value of $ 2.99 per square foot to the area of the taking to determine a value of the
land taken of $ 9,308. He then estimated damages of $ 226,245 to the remainder of
the property after the taking for what he termed were severance damages. Mr. Spake
stated that the subject site would suffer severance damage due to the lane extension,
traffic gridlock and resulting poor desirability of the site. In order to estimate these
severance damages, Mr. Spake utilized an after value study that he prepared. Using
this study, he determined an impairment factor of 40% to the subject property after
the taking, which resulted in damages of $ 226,245. He subtracted the area of the
taking from the total property and then applies a 40% damage factor in order to
determine the damages to the remainder. There is no discussion in the report of how
he arrived at his remaining land value, other than the application of the after value
study and the damage factor that Mr. Spake determined by using this study. As in
the case of his before value, Mr. Spake combined the after land value with the full
depreciated value of the improvements, as determined in the before value analysis,
to arrive at the after value. This method is in conflict with the principle of consistent
use. Mr. Spake testified at the trial about his appraisal and conclusions. In his testi-mony,
he stated that there were damages to the remaining property after the taking
that were due to utility and trends in the neighborhood. He presented no data in
either his written appraisal or his oral testimony to support this conclusion. In both
cases, Mr. Spake did not perform the assignments in accordance with USPAP.
Charles S. Thomas, III A2830 ( Pittsboro)
By consent, the Board suspended Mr. Thomas’ residential certification for one
month. The Board alleged that Mr. Thomas and a trainee appraised a property
located in Durham, North Carolina in May 2006, finding a value of $ 650,000. The
subject property is a two- story farmhouse built in 1980. It is located on a site con-sisting
of 34.37 acres. The property was appraised subject to it being located on 4.5
acres of the total acreage. The subject has an in ground pool that is enclosed within
the dwelling. The pool area contains approximately 350 square feet. The area of the
pool was included in the total gross living area, which brought the calculated square
footage for the subject to 3762. In the sales comparison approach, adjustments were
made to the sales based on the subject containing 3762 square feet, and there were
adjustments of negative $ 5000 made to the comparable sales for the lack of a pool.
In the cost approach, the entire square footage, including the pool area, was valued
at $ 100 a square foot. The subject dwelling and outbuildings were in various stages
of completion and repair. Adjustments were made to the comparable sales for the
differences in condition compared to the subject. The third comparable sale sold
for $ 1,895,000. This sale required adjustments of $ 1,135,900 and should have been
accompanied by more explanation.
James E. Wilson A6017 ( Whiteville)
By consent, the Board suspended Mr. Wilson’s general certification for a period of
three months. The suspension is stayed until March 1, 2008. If Mr. Wilson com-pletes
a course in highest and best use and a course in sales comparison by that
date, the suspension will be inactive. There were two cases against Mr. Wilson. In
the first case, the Board alleged that Mr. Wilson appraised two properties located
in Pisgah Forest, North Carolina in April 2006. The properties are adjacent to each
other and were appraised for a potential purchaser for both properties in one trans-action.
The purchaser was interested in purchasing this property to live in part of
it and build a dog- motel on the rest of the two lots. The first property is an 1866
square foot house with a basement located on .73 acres. Mr. Wilson appraised this
property for $ 460,000. The second property is a 1.71- acre vacant tract of land. Mr.
Wilson appraised this property at $ 429,000. He first valued the vacant tract as
commercial land, which was appropriate due to its location. In the appraisal of the
improved property, he stated that the highest and best use was its current use as a
residence. He valued the land, however, as commercial. The property could have
been appraised as a single- family home with excess acreage adjusted with values
derived from similar properties. It could also have been appraised as a development
property that had a dwelling on it. By appraising the property as residential, then
adjusting his sales for the land based on commercial use, Mr. Wilson violated the
principal of consistent use. In the second case, the Board alleged that Mr. Wilson
appraised a property located in Penrose, North Carolina in May 2006, finding an
appraised value of $ 147,000. The subject property is a 1946 square foot doublewide
manufactured home located on .59 acres that has an aboveground pool. Mr. Wilson
adjusted two of his sales upward $ 10,000 as none of the sales had a pool. He made
no adjustment to a third comparable sale that had outbuildings that he considered
equal in value to the pool. These adjustments were incorrect, as the pool should
have been considered personal property and not real property.
Sherman W. Young A5234 ( Asheville)
The Board accepted the voluntary surrender of Mr. Young’s residential
certification.
— continued from previous page
NORTH CAROLINA
APPRAISAL BOARD
5830 Six Forks Road
Raleigh, NC 27609
4,885 copies of this document were printed at a cost of $. 61 per copy.
PRSRT STD
U. S. Postage
PAID
RALEIGH, NC
Permit No. 2483
2008 Renewal Information
All registrations, licenses and certificates expire on June 30th and must be renewed before this date to
maintain your current status. Renewal notice forms will be mailed in early May, so be sure your address is
correct. Send in your change of address form if there have been changes since last year. You will only receive
one renewal notice.
If you do not renew by June 30, your registration, license or certificate will expire. Any person who acts as
a trainee, licensed or certified real estate appraiser while expired shall be subject to disciplinary action and
penalties as prescribed by the Appraiser’s Act.
You are not required to have continuing education in order to renew this year. You will be required to
have 28 hours of continuing education of which 7 hours must be the National 7- Hour USPAP Update course
by June 1, 2009 to renew next year. It is strongly suggested that you not wait until next year to obtain all of
your required continuing education.
The renewal fee is $ 200.00 and if you want to be on the National Registry, there is an additional fee of
$ 45.00. You must be on the National Registry to prepare appraisals related to federally related transactions.
Registered trainees are not permitted to be on the Registry, but are allowed to work on any assignments their
supervising appraiser is allowed to prepare. Please note that the fee for late renewal has increased from $ 5.00
to $ 10.00 per month.

Volume 18 March 2008 Number 1
The new education and exam requirements that have been
publicized for the last four years became effective January 1,
2008. These changes represent the largest change in qualification
requirements since appraiser licensing began in 1991. The new
criteria will apply to new applicants and also to applicants who are
upgrading a current level of licensure. A detailed explanation of
the minimum requirements to become a registered trainee or to
upgrade to certified residential or general is contained in an article
in this publication.
Information that is required reading of all applicants and a
new application is located on our website at www. ncappraisal
board. org. After accessing the homepage, click on Forms and then
2008 Real Property Appraiser
Qualification Criteria
Governor Michael F. Easley has appointed J. David Brooks of
Oxford to the Board for a three- year term. Mr. Brooks attended
North Carolina State University and has been in the appraisal
business for over 22 years and was certified in 1991. He is cur-rently
the owner of Brooks Appraisals, Inc., with primary business
in Vance, Granville, Warren and Person Counties. Mr. Brooks
is very active in church, civic and government organizations in
his local community. He is a deacon, Trustee of Vance Granville
Community College and past Chairman of the Granville County
Commissioners. He and his wife, Melinda, make their home in
Granville County.
Speaker of the House Joe Hackney has appointed Donald S.
Johnson to the Board to fill the remainder of the term of W. Tom
Morgan who resigned due to health reasons. Mr. Johnson is a cer-tified
general appraiser and is a member of the Appraisal Institute
with the designation of MAI. He is a current member of the Ethics
Administration Division of the Appraisal Institute. He is President
of Johnson and Knight Appraisal Services located in Henderson.
He has a BA degree from the University of South Florida and his
practice concentrates on the appraisal of complex properties in a
narrative format. Mr. Johnson and his wife Nancy, who is also an
MAI, make their home in Franklin County.
Governor Michael F. Easley has reappointed J. Vance
Thompson to a three- year term. Mr. Thompson was originally
appointed to the Board in 1998 by Gov. James B. Hunt, Jr. Mr.
Thompson is a certified appraiser and real estate broker. He was
County Tax Supervisor for Surry County. He has been very active
in local civic and community affairs. He and his wife, Betty, make
their home in Elkin.
Governor Michael F. Easley has appointed John D. Lyon, Jr.
to the Board for a three- year term. Mr. Lyon graduated from the
University of North Carolina with a BA degree in political science.
He has been an appraiser for 17 years and is Certified General. He
is a real estate broker and has a great deal of experience in both res-idential
and commercial real estate. Mr. Lyon is a North Carolina
Superior Court Mediator. Mr. Lyon also serves as a member of the
North Carolina Alcoholic Beverage Control Commission. He and
his wife, Dolly, make their home in Raleigh.
Recent Board Appointments
click on Information and Application to read and use this informa-tion.
The new application is designed to be used by both applicants
using the Segmented Approach of pre 2008 education and the new
2008 Education Criteria.
Experience requirements are also explained in detail in this
information and note that the schedule for experience points has
been revised effective January 1, 2008.
The Board no longer publishes a hardcopy of the Information
and Application booklet but this information is available on the
website and may be copied for your use. The use of old publica-tions
should be discontinued as the information is not correct as
of January 1, 2008.
2
Mortgage Brokers Now Cannot Try To
Improperly Influence Appraisals
A law passed in 2007 will increase the authority of the Commissioner of Banks regarding
mortgage brokers. Currently, it is prohibited for mortgage brokers to influence or attempt
to influence the development, reporting, result, or review of a real estate appraisal sought
in connection with a mortgage loan through coercion, extortion, or bribery. A mort-gage
broker may ask an appraiser to consider additional appropriate property infor-mation,
provide further detail, substantiation, or explanation for the appraiser's value
conclusion, or to correct errors in the appraisal report.
The 2007 bill amended the existing law. Effective January 1, 2008, mortgage brokers are
prohibited from improperly influencing or attempt to improperly influence the devel-opment,
reporting, result, or review of a real estate appraisal sought in connection with
a mortgage loan.
Residential Mortgage Fraud Act
Effective December 1, 2007
A law that may have a significant effect on appraisers became effective on December 1,
2007. The Residential Mortgage Fraud Act provides that a person is guilty of residential
mortgage fraud when, for financial gain and with the intent to defraud, that person does
any of the following:
1. Knowingly makes or attempts to make any material misstatement, misrepresentation, or
omission within the mortgage lending process with the intention that a mortgage lender,
mortgage broker, borrower, or any other person or entity that is involved in the mortgage
lending process relies on it.
2. Knowingly uses or facilitates or attempts to use or facilitate the use of any misstatement,
misrepresentation, or omission within the mortgage lending process with the intention that
a mortgage lender, borrower, or any other person or entity that is involved in the mortgage
lending process relies on it.
3. Receives or attempts to receive proceeds or any other funds in connection with a residential
mortgage closing that the person knew, or should have known, resulted from a violation of
subdivision ( 1) or ( 2) of this subsection.
4. Conspires or solicits another to violate any of the above.
The mortgage lending process includes the appraisal of real property, and documents
involved in the mortgage lending process include appraisal reports. Cases are prosecuted
by the District Attorney upon referral from the Office of the Commissioner of Banks,
the North Carolina Real Estate Commission, the Attorney General, the North Carolina
Appraisal Board, or other parties.
There is no requirement to show that anyone was harmed financially in the transaction
or that anyone relied on the misrepresentation. Violation of the law is a felony and can
result in a fine and imprisonment. In addition, any real or personal property used in the
commission of mortgage fraud may be seized by the state. This can include an appraiser’s
computer equipment or even a personal residence if it is used as an appraisal office.
The new law also provides that unless someone acts with fraud, bad faith or malice, a
person can’t be sued for civil liability for filing reports or furnishing information regard-ing
suspected mortgage fraud to the Appraisal Board or any other regulatory or law
enforcement agency.
Published as a service to appraisers to promote
a better understanding of the Law, Rules and
Regulations, and proficiency in ethical apprais-al
practice. The articles published herein shall
not be reprinted or reproduced in any other
publication, without specific reference being
made to their original publication in the North
Carolina Appraisal Board Appraisereport.
NORTH CAROLINA
APPRAISAL BOARD
5830 Six Forks Road
Raleigh, North Carolina 27609
Phone: 919/ 870- 4854
Fax: 919/ 870- 4859
Website:
www. ncappraisalboard. org
Email Address:
ncab@ ncab. org
Michael F. Easley, Governor
APPRAISAL BOARD MEMBERS
Henry E. Faircloth
Chairman . . Salemburg
J. Vance Thompson
Vice- Chairman . . . . . . . Elkin
J. David Brooks . . . . Oxford
Donald S. Johnson . . . Henderson
John D. Lyon, Jr. . . . . . Raleigh
Earl M. Worsley, Jr. . . Wilmington
Larry N. Wright . . . Candler
STAFF
Philip W. Humphries, Executive Director
Roberta A. Ouellette, Legal Counsel
Donald T. Rodgers, Deputy Director
Thomas W. Lewis, III, Investigator
Jeffrey H. Davison, Investigator
Terri S. Haywood, Investigator
Jacqueline Kelty, Administrative Assistant
Deborah C. Liggins, Administrative Assistant
Pam A. Privette, Administrative Assistant
Mindy M. Sealy, Administrative Assistant
APPRAISER COUNT
( As of December 27, 2007)
Trainees . 1071
Licensed Residential 413
Certified Residential 2072
Certified General 1044
Total Number 4600
APPRAISER
EXAMINATION RESULTS
July 2007– November 2007
Examination Total Passed Failed
Trainee 315 202 113
Licensed Residential 48 45 3
Certified Residential 416 258 158
Certified General 257 120 117
Examinations are administered by a national ­testing
service. To apply for the examination, please submit
an application which may be downloaded from the
Appraisal Board’s website at http:// www. ncappraisal-board.
org/ forms/ InfoAndApp. pdf
3
The Trainee Registration Process
In order to become registered as a trainee, you must com-plete
four classes. These are: Basic Appraisal Principles,
Basic Appraisal Procedures, Residential Market Analysis
and Highest and Best Use, and the 15 hour National USPAP
course. All courses must have been completed within 5 years
of the date of application.
You must be at least 18 years of age and must have a high
school diploma or a GED. You must be a United States citi-zen
or a permanent resident to become a trainee.
Once you complete the four classes, you will file an applica-tion
with us. The application fee is $ 200.00.
You must obtain a criminal record report from Carolina
Investigative Reporting and send a copy of the results to us
with your application. You get the report online at www.
ncab. myrecordcheck. com.
After we receive your complete application, we will send
you a ticket so that you can schedule the state trainee
examination.
Once you pass the examination, we will look to see if you
have had a character issue. For those applicants who do not
have a character issue, your registered trainee number will
be assigned and mailed to you. For those applicants with a
character issue, your application must go before the Board
for approval. We do not decide whether you possess the
requisite character for registration until you have success-fully
passed the state examination.
Application Form
The application form constitutes a sworn affidavit; therefore,
you must sign it before a Notary Public.
In addition to general biographical information, the applica-tion
form requires:
1. A recent photograph of yourself;
2. A list of your previous places of
residence and employment;
3. Information pertaining to your
character and reputation;
4. Information pertaining to your
appraisal education; and;
5. The application fee of $ 200.00.
Examination
The examination is given by Person Vue ( formerly Promissor),
a private testing company. You will contact them directly to
schedule the state exam. The exam is given is several loca-tions
around the state, six days a week. The testing fee is
$ 90.00 per test.
If you do not pass the examination, you must wait 30 days
before you can take it again. You will need to pay another fee
to take it again. Your test ticket is good for one year from the
date it is issued. You can take the examination three times on
one ticket.
If you fail the test three times, or if you do not pass the exam-ination
within one year, your application is cancelled. You
must wait six months before you can file a new application.
Use of Titles
Registered Trainees must utilize only the title “ registered
trainee.” You must be actively and personally supervised by a
licensed or certified real estate appraiser.
You cannot hold yourself out as or engage in the business of
a Registered Trainee until your registration has been issued
and you have your pocket card in your possession.
Finding a Supervisor
The Appraisal Board cannot assist you in finding a supervi-sor.
Ask your instructor for more information.
2008 Board Meeting Dates
January— No meeting
February 12
March 18
April— No meeting
May 13
June 17
July— No meeting
August 12
September 16
October— No meeting
November 18
December 16
All meetings are conducted at the North
Carolina Appraisal Board building located
at 5830 Six Forks Road, Raleigh.
4
Upgrading to Certified Residential
or Certified General
In order to upgrade to Certified Residential, you must
complete the following courses in addition to the courses
required to become a trainee.
• 15 hours in Residential Appraiser Site Valuation and Cost
Approach;
• 30 hours in Residential Sales Comparison and Income
Approaches;
• 15 hours in Residential Report Writing and Case Studies;
• 15 hours in Statistics, Modeling and Finance;
• 15 hours in Advanced Residential Applications and Case
Studies; and
• 20 hours of appraisal subject matter electives.
In addition, you must have an Associate degree or higher
or must have completed twenty- one ( 21) semester credit
hours covering the following subject matter courses:
English Composition; Principles of Economics ( Micro or
Macro); Finance; Algebra, Geometry or higher mathemat-ics;
Statistics; Introduction to Computers- Word Processing/
Spreadsheets; and Business or Real Estate Law.
You must also have obtained 2500 hours of appraisal experi-ence
over a minimum of two years working under the super-vision
of a licensed or certified appraiser. At least half of your
appraisal experience must be one to four unit single- family
residential properties where the sales comparison approach
is used.
In order to upgrade to Certified General, you must complete
the following courses in addition to the courses required to
become a trainee.
• 30 hours in General Appraiser Market
Analysis and Highest and Best Use;
• 15 hours in Statistics, Modeling and Finance;
• 30 hours in General Appraiser Sales
Comparison Approach;
• 30 hours in General Appraiser Site
Valuation and Cost Approach;
• 60 hours in General Appraiser Income Approach;
• 30 hours in General Appraiser Report Writing and Case
Studies;
• 30 hours of appraisal subject matter electives.
In addition, you must have a Bachelor’s degree or must
have completed thirty ( 30) semester credit hours covering
the following subject matter courses: English Composition;
Micro Economics; Macro Economics; Finance; Algebra,
Geometry or higher mathematics; Statistics; Computer
Science; Business or Real Estate Law; and two elective courses
in accounting, geography, agricultural economics, and busi-ness
management or real estate.
You must also have obtained 3000 hours of appraisal expe-rience
over a minimum of two and one half years working
under the supervision of a certified appraiser. At least half
of your appraisal experience must have been in appraising
non- residential real estate. At least 50 percent of the non-residential
appraisal experience must have been of complex
properties or of improved properties in which the income
approach was utilized in the appraisal process.
Required Appraisal Experience
To better assure consistency and fairness in evaluating
appraisal experience, we use a point system that serves as a
guideline for evaluating experience. This point system takes
into consideration the number of appraisals you perform,
the types of appraisals performed, and the types of proper-ties
appraised.
All qualifying experience must have been obtained by per-forming
or reviewing appraisals using appraisal methods
and processes that are commonly employed by real estate
appraisers. All qualifying experience must comply with
USPAP.
All experience must have been obtained within the five ( 5)
year period immediately preceding the date of examination.
You must keep a log of all appraisals you perform.
You may receive experience credit for appraisals where you
perform at least 75% of the work on the appraisal. Up to 50%
of your experience may be in appraisal reviews, and up to
20% may be demonstration appraisals.
Your supervisor will be able to answer questions about
appraisal experience.
5
Question: Does the expectation to have a transcript or a
summary apply only in assignments when an appraiser
provides an oral report?
Response: No. The requirements identified in the Record
Keeping section of the Ethics Rule apply to both oral
reports and testimony in an appraisal, appraisal review, or
appraisal consulting assignment.
Question: Is a transcript of an oral report or testimony
required for the workfile when an appraiser testifies about
an appraisal assignment?
Response: No. There is no absolute requirement to have
a transcript of the appraisal oral report testimony. The
Record Keeping section of the Ethics Rule requirement is
for the workfile to contain summaries ( which are typically
prepared by the appraiser) or a transcript. In cases where
summaries are retained, a transcript is not required.
Question: Does the expectation to have a transcript or
summary of testimony apply if the appraiser has a written
appraisal report and testifies only to the information con-tained
in that report?
Response: Yes. A transcript or summary of the testimony
must be included in the workfile when the appraiser testi-fies
about a written report. While the report that is the
subject of the appraiser’s testimony must also be included
in the assignment workfile, it does not replace a summary
of the testimony.
Mechanic’s Liens on Real Property For
Non- payment of Appraisal Fees
Appraisers may not place a mechanic’s lien on real property for non- payment of appraisal fees. Current law does not allow
such a lien. State law allows a mechanic’s lien for any person who performs or furnishes labor or materials pursuant to a con-tract
with the owner of real property for making an improvement thereon or for professional design or surveying services.
A lien for non- payment of appraisal fees is not allowed, since an appraisal is not an improvement to the real property. An
appraiser must file suit in court ( usually small claims court) and obtain a judgment. If the judgment is not paid, the appraiser
can then ask the court for a lien on any property owned by the judgment debtor.
There are several problems with allowing a mechanic’s lien on real property for appraisal fees. In many situations, there is no
contract with the owner of the subject property as a mortgage broker, AMC or financial institution is the appraiser’s client.
An appraisal is generally done on behalf of a financial institution in order to value collateral for a loan. The owner may not
even know that an appraisal is being performed. For example, a financial institution may be valuing its portfolio in order
to sell some loans, or may value a specific property to make a decision on foreclosure. Although in some circumstances the
property owner may get some benefit from the appraisal and may consent to the appraisal being done, this does not give rise
to a relationship that allows the placement of a lien.
State law provides that any person who files a claim of a lien on real property, knowing that the filing is not authorized by
statute, or with the intent that the filing is made for an improper purpose such as to hinder, harass, or otherwise wrongfully
interfere with any person, is guilty of a Class 1 misdemeanor.
Question: If an appraiser prepares a written appraisal
report, is the workfile required to contain a separate
signed certification for any testimony the appraiser pro-vided
in support of that report?
Response: In cases where testimony is provided about
information contained in a written appraisal, appraisal
review, or appraisal consulting report, a signed certifica-tion
is required to be included in the written report. The
requirement to include a signed certification is satisfied
by including a true copy of the report in the workfile,
consistent with the Record Keeping section of the Ethics
Rule.
Question: Must the workfile contain a transcript or
summary of an appraiser’s testimony for the entire
proceeding, or only for that portion that contains the
appraiser’s testimony?
Response: The appraiser’s workfile must contain a sum-mary
or a transcript of the appraiser’s testimony in
an appraisal, appraisal review, or appraisal consulting
assignment. The appraiser is not obligated to retain sum-maries
or transcripts for other segments of the proceed-ings
in which testimony was provided by individuals
other than the appraiser.
USPAP Q & A
6
Allen Tate School of Real Estate— A Dan Mohr School
5000 Nations Crossing Road, Suite 206
Charlotte, NC 28217
704- 362- 2296
Mfg/ Mod Homes & Real Property ( 7/ 7)
New Rules & Regs FHA/ HUD Appraisal
Requirements ( 14/ 14)
Residential Construction Seminar ( 14/ 14)
Staying Out of Trouble— NC App ( 7/ 7)
American Society of Farm Managers and Rural Appraisers
950 South Cherry Street, Suite 508
Denver, CO 80222
303- 758- 3513
16- Hr Uniform Agricultural Appraisal Report
Seminar ( 16/ 16)
8- Hr Uniform Agricultural Appraisal ( 8/ 8)
A- 25 Eminent Domain ( 19/ 19)
A- 36 Intro to Appraisal Review ( 14/ 14)
A- 370 Appraisal Review ( 22/ 21)
Advanced Appraisal Review Case Studies ( A390) ( 16/ 16)
Advanced Approaches to Value for Rural Appraisal ( 41.5/ 30)
Advanced Rural Case Studies ( 36/ 30)
Advanced Sales Confirmation & Analysis ( 8/ 8)
Appraising Agricultural Land in Transition ( 14/ 14)
Appraising Agricultural Land in Transition ( 8/ 8)
Appr Rev Under Uniform App Stnd for Fed
Land Acq ( A380) ( 16/ 16)
ASFMRA Code of Ethics ( 4/ 4)
Cost Estimating ( 8/ 8)
Dairy Facility Appraising - A Mooving Target ( 16/ 16)
Intermediate Appraoches to Value for Rural
Appraisal ( 41/ 30)
Intro to the Approaches to Value for Rural Appraisal ( 41/ 30)
National USPAP Update 2008 ( 7/ 7)
Valuation of Conservation Easements ( 33/ 30)
American Society of Appraisers, NC Chapter
121 SE 21st Street
Oak Island, NC 28465
910- 278- 7151
Appraising Small Residential Income Properties ( 7/ 7)
The Appraisal of Small Subdivisions ( 7/ 7)
AppraisalSchools by M. Curtis West
P. O. Box 947
Zebulon, NC 27597
919- 404- 5115
800- 317- 8040
Scope of Work in the Appraisal Process ( 7/ 7)
Appraisal Institute
550 W. Van Buren Street, Suite 1000
Chicago, IL 60607
312- 335- 4100
330 Apartment Appr: Cncpts & ( 14/ 14)
420 Business Practice and Ethics ( 7/ 7)
530 Adv Sales Comp & Cost Appr ( 40/ 30)
600 Inc Val of Sm Mixed- Use Prop ( 15/ 15)
610 Cst Val of Sm Mixed- Use Prop ( 15/ 15)
620 Sls Comp Val Sm Mixed- Use ( 15/ 15)
700 Appraisers as Expert Witness ( 15/ 15)
705 Litigation Appr: Spclzd Topics & ( 16/ 16)
710 Condemnation Appr: Basic Prin & ( 15/ 15)
Approved Continuing Education Courses ( As of of January 29, 2008)
Listed below are the courses approved for appraiser continuing education credit as of date shown above. Course sponsors are listed
alphabetically with their approved courses. Shown parenthetically beside each course title are sets of numbers [ for example: ( 15/ 10)]. The
first number indicates the number of actual classroom hours and the second number indicates the number of approved continuing edu-cation
credit hours. You must contact the course sponsor at the address or telephone number provided to obtain information regarding
course schedules and locations.
720 Condemnation Appr: Adv Topics & ( 15/ 15)
810 Computer- Enhanced Cash Flow Mod ( 15/ 15)
Adv Res Applctns & Case Studies ( 14/ 14)
Adv Res Report Writing Pt 2 ( 28/ 28)
An Introduction to Valuing Green Buildings ( 7/ 7)
Analytics with the Site to do Business ( 7/ 7)
Appraisal Challenges: Declining Markets & Sales ( 7/ 7)
Appraising Manufactured Housing ( 7/ 7)
Condominiums Co- Ops & PUDS ( 7/ 7)
Forecasting Revenue ( 7/ 7)
General Appraiser Income Approach Part 1 ( 27/ 27)
General Appraiser Income Approach Part 2 ( 27/ 27)
General Appraiser Report Writing & Case Studies ( 28/ 28)
Gen Appr Sales Comp Approach ( 28/ 28)
Gen Appr Site Valuation & Cost Approach ( 27/ 27)
Gen Demo Appr Rpt Writing Sem ( 7/ 7)
General Market Analysis & Highest & Best Use ( 28/ 28)
Liability Management for Residential Appraisers ( 7/ 7)
Office Bldg Valuation: A Contemporary Perspective ( 7/ 7)
O/ L 15- Hour National USPAP Equivalent Course ( 15/ 14)
O/ L 420: Business Practices & Ethics ( 8/ 7)
O/ L Analyzing Distressed Real Estate ( 4/ 4)
O/ L Analyzing Operating Expenses ( 7/ 7)
O/ L Appraisal of Nursing Facilities ( 7/ 7)
O/ L Appraising Convenience Stores ( 7/ 7)
O/ L Appraising from Blueprints ( 7/ 7)
O/ L Apartment Appraisal, Concepts & Applications ( 15/ 14)
O/ L Appraising Manufactured Housing ( 7/ 7)
O/ L Basic Appraisal Principles ( 28/ 14)
O/ L Basic Appraisal Procedures ( 28/ 14)
O/ L Condominiums, Co- Ops & PUD's ( 7/ 7)
O/ L Cool Tools: New Technology for RE Appraisers ( 7/ 7)
O/ L Eminent Domain & Condemnation ( 7/ 7)
O/ L Feasibility, Market Value, Investment Timing:
Option Value ( 7/ 7)
O/ L GIS - The Building Case Study ( 14/ 14)
O/ L GIS - The Novice Case Study ( 7/ 7)
O/ L Internet Search Strategies for R ( 7/ 7)
O/ L Intro to GIS Apps for RE App ( 7/ 7)
O/ L Intro to International Valuation Standards ( 8/ 8)
O/ L Marshall & Swift Commercial Cost Training ( 7/ 7)
O/ L Prof Guide to the FNMA 2- 4 Unit Form 1025 ( 10/ 10)
O/ L Real Estate Finance, Statistics & Valuation
Modeling ( 14/ 14)
O/ L Res Design & Functional Utility ( 7/ 7)
O/ L Res Mkt Analysis & Highest & Best Use ( 14/ 14)
O/ L Res Property Construction & In ( 7/ 7)
O/ L Residential Report Writing & Case Studies ( 14/ 14)
O/ L Res Sales Comparison & Income Approach ( 28/ 14)
O/ L Reviewing Residential Appraisals and Using
Fannie Mae forms ( 7/ 7)
O/ L Scope of Work: Expanding Your Range of Services ( 7/ 7)
O/ L Sm Hotel/ Motel Val: Lmtd S ( 7/ 7)
O/ L The FHA and the Appr Proce ( 7/ 7)
O/ L The Professional's Guide to the URAR ( 7/ 7)
O/ L Using Your HP12C Financial ( 7/ 7)
O/ L Val of Detrimental Conditions ( 7/ 7)
O/ L What Commercial Clients Would Like Appraisers
to Know ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
Quality Assurance in Residential Appraisals ( 7/ 7)
RE Finance, Stats, Valuation M ( 14/ 14)
Real Estate Investing & Development: A Valuation
Prosp ( 7/ 7)
REO Appraisal- Appraisal of Resiential Property ( 7/ 7)
Report Writing & Valuation Analysis ( 40/ 30)
Res Demo Appr Report Writing S ( 7/ 7)
Res Market Analysis & Highest and Best Use ( 14/ 14)
Residential Report Writing & Case Stud ( 14/ 14)
Reviewing Residential Appr Rpt ( 7/ 7)
Residential Sales Comparison & Income
Approaches ( 28/ 28)
Residential Site Valuation & Cost Approach ( 14/ 14)
Scope of Work: Expanding Range ( 7/ 7)
Subdivision Valuation ( 7/ 7)
Uniform Appraisal Standards for Federal Land
Acquisitions ( 16/ 15)
Valuation of Conservation Easements ( 33/ 30)
Appraisal Institute NC Chapter
3717 W. Market Street, Suite C
Greensboro, NC 27403
336- 297- 9511
Evaluating Commercial Construction ( 16/ 16)
Bob Ipock & Associates, Inc.
1218 Heatherloch Drive
Gastonia, NC 28054
704- 867- 1985
National USPAP Update 2008 ( 7/ 7)
BudBlack. net
P. O. Box 11111
Cherryville, NC 28021
800- 750- 1114
National USPAP Update 2008 ( 7/ 7)
Sales Comparison Analyses Based on Market Data ( 7/ 7)
Value? What Value? ( 4/ 4)
Career Webschool
1395 S. Marietta Pkwy., Bldg. 400, Suite 107
Marietta, GA 30067
770- 919- 9191
O/ L A URAR Form Review ( 7/ 7)
O/ L Appraisal Methods ( 14/ 14)
O/ L Overview of Appr Process ( 14/ 14)
O/ L Residential Appr Site Valuation & Cost
Approach ( 14/ 14)
O/ L Res Mkt Analysis & Highest & Best Use ( 14/ 14)
O/ L Residential Report Writing & Cases ( 14/ 14)
CCIM Institute
430 N. Michigan Avenue, 8th Floor
Chicago, IL 60611- 4092
312- 321- 4473
C1101 Financial Analysis of Commercial Invest. ( 30/ 30)
C1102 Market Analysis Comm Inv. ( 30/ 30)
C1103 User Decision Analysis Comm Inv. ( 30/ 30)
C1104 Invest Analysis Comm Inv. ( 30/ 30)
Intro to Com Investment RE An ( 12/ 12)
Columbia Institute ( The)
8546 Broadway, Suite 165
San Antonio, TX 78217
800- 460- 3147
FHA, the URAR & the 1025, No. 104 ( 8/ 8)
Fundamentals of Appraisal Review No. 105 ( 8/ 8)
National USPAP Update 2008 ( 7/ 7)
O/ L Residential Report Writing & Case Studies ( 14/ 14)
O/ L URAR Form Review ( 7/ 7)
Scope of Work & Appraiser Due Diligence ( 4/ 4)
7
Survey of the Cost Approach ( 8/ 8)
Creative Education
PO Box 640
Alexis, NC 28006
704- 867- 0485
O/ L The Cost Approach ( 7/ 7)
O/ L The Income Approach ( 7/ 7)
O/ L The Sales Comparison Approach ( 7/ 7)
Dan Mohr Real Estate Schools
1400 Battleground Avenue, Suite 150
Greensboro, NC 27408
800- 639- 9813
Depreciation Workshop ( 7/ 7)
Environmental Hazards- Res Prop ( 7/ 7)
Extraction of Data from Market Res ( 7/ 7)
HP 12C Course ( 7/ 7)
Intro to Residential Construction ( 30/ 30)
Mfg/ Mod Homes & Real Prop App ( 7/ 7)
Res Appr & Conv Underwriting Guide ( 7/ 7)
Residential Construction Cost ( 7/ 7)
Residential Construction Seminar ( 14/ 14)
Rules & Regs FHA/ HUD Rqrmnt ( 14/ 14)
Staying Out of Trouble— NC App ( 7/ 7)
The Narrative Appraisal Report ( 7/ 7)
Dynasty School
2373 S. Hacienda Boulevard
Hacienda Heights, CA 91745
800- 888- 8827
O/ L Real Estate Appraisal ( 14/ 14)
O/ L Residential Report Writing ( 15/ 15)
Edgecombe Community College
225 Tarboro Street
Rocky Mount, NC 27801
252- 446- 0436
Appr Mfg, Mod & Mobile ( A) ( 7/ 7)
Appr Mfg, Mod & Mobile ( B) ( 7/ 7)
Cst Appr Marshall & Swift Res & Co ( 7/ 7)
Income Capitalization ( 14/ 14)
Income Capitalization ( A) ( 7/ 7)
Income Capitalization ( B) ( 7/ 7)
Mfg, Modular & Mobile ( 4/ 4)
Narrative Appraisal Report Writing ( 14/ 14)
New FNMA Forms— Multifamily ( 7/ 7)
New FNMA Forms— Single Family ( 7/ 7)
Pricing Small Income Properties ( 4/ 4)
Principles & Techniques Val 2- 4 Units Res Prop ( 14/ 14)
Principles & Techniques for Determining
Market Adjustments ( 7/ 7)
RE Finance for Appraisers ( 14/ 14)
Rural Valuation Seminar ( 14/ 14)
Single Fam Res App ( 14/ 14)
Standards of Professional Practice ( 15/ 15)
USPAP & NC Board Rules & Regs for ( 15/ 15)
Hignite Training Service
208 Gloria Street
Greenville, NC 28328
866- 444- 6483
Advisory Opinions in Depth ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
Institute of Government, UNC, Chapel Hill
Knapp Building, CB# 3330
Chapel Hill, NC 27599- 3330
919- 966- 4157
Assessment Administration ( 30/ 7)
IAAO 101: Fundamentals of Real Property ( 30/ 30)
IAAO 102: Income Approach to Valuation ( 30/ 30)
IAAO 311: Residential Modeling Concepts ( 30/ 30)
IAAO 402: Property Tax Policy ( 30/ 30)
JVI
951 Market Promenade Avenue
Lake Mary, FL 32746
407- 531- 5333
Appraising REO Properties ( 7/ 7)
O/ L JVI Appraising Residential REO Properties ( 6/ 6)
McKissock Appraisal Schools
P. O. Box 1673
Warren, PA 16365
800- 328- 2008
Appraising REO & Foreclosure Properties ( 7/ 7)
Even Odder: More Oddball Appraisals ( 7/ 7)
Mortgage Fraud: Protect Yourself ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
O/ L 2- 4 Family Finesse ( 7/ 7)
O/ L Appr for the Secondary Market ( 7/ 7)
O/ L Appraisal Trends ( 7/ 7)
O/ L Appraiser Liability ( 7/ 7)
O/ L Appraising FHA Today ( 7/ 7)
O/ L Appraising Historic Properties ( 4/ 4)
O/ L Appraising the Oddball ( 7/ 7)
O/ L Art of Residential Appraisal ( 7/ 7)
O/ L Construction Details & Trends ( 7/ 7)
O/ L Environmental Issues for Appraisers ( 5/ 5)
O/ L Even Odder: More Odd ( 7/ 7)
O/ L Made in America ( 7/ 7)
O/ L Private Appraisal Assignments ( 7/ 7)
O/ L Relocation Appraisal is Dif ( 7/ 7)
O/ L Technology for Todays Appraiser ( 5/ 5)
O/ L The Cost Approach ( 7/ 7)
O/ L The Evolution of Finance and the
Mortgage Market ( 4/ 4)
Relocation Appraisal is Differ ( 7/ 7)
Mel Black/ NCREEI
P. O. Box 7
Gastonia, NC 28053
704- 864- 1711
2- 4 Family Properties ( 7/ 7)
Appraisal Case Law ( 7/ 7)
Appraisal Case Law II ( 7/ 7)
Board Rules and Laws ( 7/ 7)
Exam Prep for Appraisers ( 14/ 14)
FHA & VA Appraiser: Thriving & Surviving ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
O/ L FHA & VA Appraisal Basics ( 7/ 7)
O/ L Income Approach ( 7/ 7)
O/ L Intro to Commercial Appraisal ( 3.5/ 3.5)
O/ L Mortgage Fraud: A Dangerous Business ( 7/ 7)
O/ L Residential Cost Approach ( 7/ 7)
O/ L Sales Comparison Approach ( 7/ 7)
Reviewing Apprs on New FM Form ( 4/ 4)
Sales Comp Analy Based on Mk ( 7/ 7)
Technical Writing for Appraisers ( 7/ 7)
Trainees & Supervisors ( 7/ 7)
Mingle School of Real Estate
P. O. Box 35511
Charlotte, NC 28235
704- 372- 2984
O/ L Residential Cost Approach ( 7/ 7)
O/ L Sales Comparison Approach ( 7/ 7)
O/ L The Income Approach ( 7/ 7)
Surry Community College
P. O. Box 304
Dobson, NC 27017
336- 386- 8121
Fannie Mae Updated Property & Appr Guidelines ( 8/ 8)
Home Inspections & Common De ( 4/ 4)
Is the Comparable Comparable ( 8/ 8)
Mobile Mfg Homes & Types of M ( 4/ 4)
Prep 2- 4 Sm Resid Income Prop Appr Rpt ( 8/ 8)
Preparation of a Quality URAR ( 8/ 8)
Reviewing a Residential Appraisal ( 8/ 8)
Scope of work ( 7/ 7)
Testing Highest & Best Use ( 8/ 8)
Triangle Appraisal & Real Estate School
2801- 3V Ward Boulevard
Wilson, NC 27693
252- 291- 1200 or 919- 971- 1887
Manufactured Home Construction ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
North Carolina Rules ( 7/ 7)
The Cost Approach & Insurable Interest ( 7/ 7)
Wachovia Appraisal Training
4101 Wiseman Boulevard
San Antonio, TX 78251
210- 543- 5338
Appraisal Review 2 ( 8/ 8)
Appraising in a Changing Market ( 4/ 4)
Appraising the High End Home ( 8/ 8)
National USPAP Update 2008 ( 7/ 7)
Wendell Hahn & Associates
PO Box 5245
Columbia, SC 29250
803- 779- 4721
Appraisal Update 2007 ( 7/ 7)
FHA Appraisal Update ( 7/ 7)
National USPAP Update 2008 ( 7/ 7)
New FNMA Forms ( 7/ 7)
Property Inspection for Appraisers ( 7/ 7)
Residential Case Studies ( 7/ 7)
Six Critical Problems that Appraisers Face ( 7/ 7)
Worldwide Employee Relocation Council
1717 Pennsylvania Ave. NW # 800
Washington, DC 20006- 4665
202- 857- 0857
O/ L The Relocation Appr Training Program ( 6/ 6)
8
The following is a summary of recent disciplinary actions taken by
the Appraisal Board. This is only a summary; for brevity, some of the
facts and conclusions may have not been included. Because these are
summaries only, and because each case is unique, these summaries
should not be relied on as precedent as to how similar cases may be
handled.
Disciplinary Actions
Catherine Alexander A5734 ( Cornelius)
By consent, the Board issued a reprimand to Ms. Alexander and ordered her to
take a course in sales comparison and a course in appraising manufactured or fac-tory
built homes by December 1, 2007. If she fails to take these courses by that date,
the reprimand will be vacated and a one- month active suspension will be imposed
on December 1, 2007. The Board alleged that Ms. Alexander appraised a property
located in Davidson, North Carolina in August 2005, finding an appraised value of
$ 350,000. The subject property is a 1.5 story modular home containing 2427 square
feet. It was built in 2002, and it is located on a 2- acre site. Ms. Alexander did not
note in the report that the subject dwelling is modular construction. In the Sales
Comparison Approach, Ms. Alexander selected properties that were stick built for
comparison. There were few sales of modular homes in the area. Ms. Alexander
should have made location adjustments to her comparable sales.
Dawn M. Cook T1527 ( Durham)
By consent, the Board suspended Ms. Cook’s trainee registration for a period of one
month, which is stayed until June 30, 2008. If she takes courses in sales comparison
and in appraising difficult properties by that date, the suspension will be inactive.
The Board alleged that Ms. Cook appraised a property located in Durham, North
Carolina in May 2006, finding a value of $ 650,000. The subject property is a two-story
farmhouse built in 1980. It is located on a site consisting of 34.37 acres. The
property was appraised subject to it being located on 4.5 acres of the total acreage.
The subject has an in ground pool that is enclosed within the dwelling. The pool
area contains approximately 350 square feet. The area of the pool was included in the
total gross living area, which brought the calculated square footage for the subject to
3762. In the sales comparison approach, adjustments were made to the sales based
on the subject containing 3762 square feet, and there were adjustments of negative
$ 5000 made to the comparable sales for the lack of a pool. In the cost approach,
the entire square footage, including the pool area, was valued at $ 100 a square foot.
The subject dwelling and outbuildings were in various stages of completion and
repair. Adjustments were made to the comparable sales for the differences in condi-tion
compared to the subject. The third comparable sale sold for $ 1,895,000. This
sale required adjustments of $ 1,135,900 and should have been accompanied by more
explanation.
Michael J. Daly A4943 ( Kitty Hawk)
By consent, the Board issued a reprimand to Mr. Daly and ordered him to take a
course in the sales comparison approach and a course in the income approach by
June 1, 2008. If he fails to do so, a three month suspension will be activated on that
date. The Board alleged that Mr. Daly appraised a property located in Nags Head,
North Carolina in August 2005, finding a value of $ 580,000. The subject property is
an oceanfront beach house containing 1812 square feet. Mr. Daly used four compa-rables
in his sales comparison approach. One of the sales had a fireplace and board-walk
to beach that were not noted or adjusted for. Although the subject and most of
the properties in this area were used as rentals, Mr. Daly did not utilize the Income
Approach and could have include more information in the report to support his
conclusion that the Income Approach was not applicable or necessary. Mr. Daly
also appraised a property located in Kill Devil Hills, North Carolina in August 2005,
finding a value of $ 270,000. This property is a beach box style home on pilings, with
960 square feet. Mr. Daly did not develop the income approach on this property,
although he did include a rental addendum and an operating income statement in
the report. The operating income reconciliation included in the report did not take
into account monthly housing expense.
Peter J. Gallo A5849 ( Charlotte)
By consent, the Board suspended Mr. Gallo’s residential certification for a period
of one month. Mr. Gallo also agrees to complete a course in sales comparison, a
course in appraising manufactured or factory built housing and the 15 hour National
USPAP course. If he fails to complete the courses, he will be suspended for an addi-tional
eleven months. The Board alleged that Mr. Gallo appraised a property located
in Charlotte, North Carolina in May 2005, finding an appraised value of $ 115,000.
For comparable sales, Mr. Gallo selected three stick built properties and two manu-factured/
modular homes from other areas. He made negative adjustments to his
comparable sales for the differences. Although Mr. Gallo signed a certification that
he had inspected the exterior of his comparable sales, he did not do so.
William D. Graves, III A4133 ( Oriental)
By consent, the Board suspended Mr. Graves’ residential certification for a period
of one month. Mr. Graves must also complete courses in sales comparison, the cost
approach and the valuation of vacant land. If he fails to take the courses, he will
receive an additional three month suspension. The Board alleged that Mr. Graves
appraised four properties located in Pamlico County, North Carolina in October
2005. The first subject property consists of a 560 square foot cottage built in 1933
located on a .10- acre lot fronting on a river. Mr. Graves valued the subject at
$ 148,000 as of October 20, 2005. The appraisal was reported on a Land Appraisal
Report form. The dwelling was noted as a structure but given no value. The com-parable
lot sales are all larger and adjustments were made for this fact. The second
subject property is a 1.39 acre vacant lot bordering the river. Mr. Graves valued the
subject at $ 233,000 as of October 18, 2005.
The original appraisal report did not mention that there is a 100- foot wide perma-nent
access easement from the road to the river deeded to the lot across the street
from the subject. After this was pointed out to the Mr. Graves, he changed the value
to $ 175,000 in May 2006 to reflect the easement. The third subject property is a .46
vacant lot in a riverside neighborhood, located across the street from the river lots.
The property was valued at $ 67,000 as of October 18, 2005. The fourth subject prop-erty
is a .46 acre vacant lot located on a corner with canal access. The property was
valued at $ 82,000 as of October 20, 2005. Mr. Graves did not note in this report that
has an access easement for a neighbor, a drainage easement, and a CAMA setback.
He made a positive adjustment of $ 15,000 because the subject had a boat shed, bulk
head, canal frontage, and access to the river. The highest and best use was stated
as “ present use” on all four appraisal reports. The intended use and purpose of the
appraisal was not stated on any of the reports.
Donald Haynes A2696 ( Dallas)
By consent, the Board suspended Mr. Haynes’ general certification for a period
of two years. If Mr. Haynes completes a course in sales comparison, a course in
appraising complex properties and a course in highest and best use, only the first
twelve months of the suspension will be active. The Board alleged that Mr. Haynes
appraised a property located in Leland, North Carolina in November 2005, find-ing
an appraised value of $ 70,100,000. The subject property constitutes multiple
tracts of land totaling 2,200 acres that is situated adjacent to an industrial park. The
purpose of the appraisal was to determine market value of the subject property in
connection with the possible sale of the subject. Mr. Haynes described the report as
a “ complete narrative” and does not indicate whether the report is self- contained,
summary, or restricted. On the effective date of the report, the subject was under
contract for $ 38,500,000. This was not mentioned or analyzed in the report. Mr.
Haynes determined that the highest and best use of the subject property was multi-use,
incorporating both residential and commercial uses. He divided the tract into
a residential area and a commercial/ manufacturing area. His comparable sales were
all much smaller in size than the subject and did not share the same highest and best
use. Mr. Haynes made minimal adjustments to the sales for these factors. By failing
to make appropriate adjustments, he over valued the subject property. There were
other sales available that would have led to a lower value for the subject property.
Teri A. Hoke A4201 ( Mount Holly)
By consent, the Board suspended Ms. Hoke’s residential certification for a period of
six months. The first month of the suspension is active and the remainder is stayed
until July 1, 2008. If Ms. Hoke completes a course in appraising modular homes
and a course in appraiser liability by that date, the remainder of the suspension
will be inactive. In addition, Ms. Hoke agrees to not perform any appraisal services
that involve the development and subsequent reporting of her opinion of value for
a period of twelve months from the date of the consent order. Ms. Hoke will only
serve in a review capacity under the direct supervision of a manager. Ms. Hoke per-formed
an appraisal of a property located in Rockwell, North Carolina in September
2002, finding an appraised value of $ 385,000. The appraisal was performed per plans
and specifications. The subject property was a proposed modular dwelling to be
— continued on next page
9
located on a 2 acre site. Ms. Hoke did not note in the report that the subject was
modular. The Board alleged that the sales she used were superior to the subject in
location and appeal, and she made inadequate adjustments for these factors. There
were other sales available that were more comparable to the subject property.
Robert Katen T4002 ( Raleigh)
By consent, the Board suspended Mr. Katen’s trainee registration for a period of
three months. The suspension is stayed until March 1, 2008. If Mr. Katen com-pletes
a course in appraiser liability and a course in sales comparison by that date,
the suspension will be inactive. The Board alleged that Mr. Katen, working under
the supervision of a certified residential appraiser, appraised a property located in
Durham, North Carolina in August 2006, finding an appraised value of $ 135,000.
The appraisal reported the GLA as 1540 square feet, when it was actually closer to
1270 square feet. Mr. Katen and his supervisor were using a rain- damaged sketch
when they prepared the appraisal report, so they could not read some of their mea-surements.
In addition, they included a small amount of unfinished/ unheated area
in their GLA. As a result of miscalculating the subject’s GLA, Mr. Katen and his
supervisor chose comparable sales that ranged in GLA from 1470 to 1650 square
feet. This resulted in an inflated value for the subject property. The seller had pur-chased
the property for $ 58,000 in July 2006, and subsequently made over $ 30,000
in repairs and renovations to it. Mr. Katen and his supervisor did not report this
sale in their report.
Roger Knox A5155 ( Winterville)
By consent, the Board suspended Mr. Knox’s residential certification for a period of
one year. The first six months of the suspension is active and the remainder is stayed
until April 1, 2008. If Mr. Knox completes a course in highest and best use and a
course in the valuation of detrimental conditions by that date, the remainder of the
suspension will be inactive. The Board alleged that Mr. Knox appraised a property
located in Emerald Isle, North Carolina in June 2006, finding an appraised value of
$ 900,000. The subject property is one half of an oceanfront duplex that had been
turned into a condo. It has 2405 square feet, was built in 1985, and had an effective
age of 10. It is located on a nonconforming ocean front beach lot. The majority of
the dwelling is located between the vegetation line and the surf. If it were destroyed,
it could not be rebuilt with the setbacks and restrictions in place at the time of the
appraisal. On the effective date of the appraisal, both units were listed for sale as one
property for $ 1,250,000, but this information was not noted in the appraisal report.
Mr. Knox inserted the contract price in this section. His comparable sales are all
located on superior lots ( conforming) but no adjustments were made. The subject is
a rental property, but the income approach was not developed and no explanation
was given. Although the subject lot was in the nonconforming area of the beach,
Mr. Knox made no adjustment for this fact to his comparable sales. There were sales
more similar to the subject that would indicate a lower value for the subject prop-erty.
By failing to make adjustments in the sales comparison approach for the fact
that the property was nonconforming, and by failing to choose sales that were more
comparable to the subject, Mr. Knox over valued the subject property.
Justin D. Loeback A5380 ( Raleigh)
By consent, the Board suspended Mr. Loeback’s residential license for a period of
six months. The first two months of the suspension shall be active and the remain-der
stayed until March 1, 2008. If Mr. Loeback completes a course in sales com-parison
and the 15 hour National USPAP course by March 1, 2008, the remainder of
the suspension will be inactive. The Board alleged that Mr. Loeback performed an
appraisal of a property located in High Point, North Carolina in September 2005,
finding an appraised value of $ 115,000. The subject is a 1071 square foot, one- story
house with six rooms including three bedrooms and one bath. All of the compa-rables
used in the report were superior to the subject in location and appeal, yet Mr.
Loeback made inadequate adjustments for the differences. There were other sales
available that would have led to a lower value for the subject property. Mr. Loeback
overvalued the subject property.
John P. McPherson, Sr. A2017 ( Pinehurst)
The Board accepted the voluntary surrender of Mr. McPherson’s general
certification.
Joseph F. Moore A2655 ( Asheville)
By consent, the Board suspended Mr. Moore’s general certification for a period of
two months. Mr. Moore also agrees to complete a course in a course in the income
approach and a course in the cost approach by April 30, 2008. If he fails to com-plete
these courses by that date, the two- month suspension will be extended until
he successfully complete the courses. The Board alleged that Mr. Moore was one of
two appraisers who signed two appraisals of a proposed veterinary clinic located
in Henderson, North Carolina in 2004. The first report was performed effective
January 23, 2004, with a value of $ 460,000, for the purchase of the property. The
report utilized a hypothetical condition that the subject was being appraised as
though vacant and the appraisers gave no value to the existing improvements. This
hypothetical condition was not adequately stated in the report. The second report
was performed effective May 25, 2004, with a value of $ 1,020,000, subject to the
construction of a veterinary clinic. The appraisers used the income approach to
value as there was sufficient data to credibly develop an opinion with this approach.
The appraisers considered the cost approach to value and found it applicable but
not necessary.
In the income approach to value on the second report, the appraisers used a capi-talization
rate of 7.4%. The rate was derived using a web- based national data service
as a source for the cap. rate. The capitalization rate used in the appraisal was inap-propriate
for the market area and was too low.
David C. Norris A6051 ( Wake Forest)
By consent, the Board suspended Mr. Norris’ residential certification for a period
of one month. Mr. Norris must also complete courses in sales comparison, the cost
approach, and the 15 hour National USPAP course with exam. If he fails to com-plete
the courses, he will receive an additional eleven month suspension. There were
two cases against Mr. Norris. In the first case, the Board alleged that Mr. Norris
appraised a property located in Raleigh, North Carolina in April 2006. The subject
property is a contemporary 2 story that was built in 1973 and renovated in 2004. It
contains 2077 square feet and in located on a .16 acre site. The property had sold
in June 2004 for $ 252,000. It sold again in November 2005 for $ 405,000 after sig-nificant
renovations. It was listed for sale for $ 410,000 from December 2004 until
October 2005. Mr. Norris first appraised the property in April 2006, finding a value
of $ 580,000. No client was shown on the report. He appraised it again, in a report
also dated April 11, 2006. A client and borrower are indicated on the report. This
report shows a contract price of $ 496,000 with contract date of April 17, 2006. The
report also found a value of $ 580,000. The third appraisal was dated July 26, 2006.
This report is identical to the other two reports, with the addition of one sale that
closed in 2006. The appraised value is $ 585,000. On all three reports, Mr. Norris did
not report the complete 3- year sales history, just the most recent sale. There were
other sales in the subject’s immediate area that he should have considered in these
reports. In the second case, the Board alleged that Mr. Norris completed a total
of four appraisals on a property located in Raleigh, North Carolina. The subject
property is a one and a half- story home that contains 1870 square feet and has a
992 square foot basement. It is located on a .4- acre lot in an area of a city that is in
transition. The first report was done effective January 17, 2006, finding an appraised
value of $ 500,000. On the effective date of the appraisal, the subject was listed for
sale for $ 389,900. The report noted the fact that the subject was offered for sale, but
did not include the listing price. The second report was done effective March 27,
2006, finding an appraised value of $ 500,000. Mr. Norris noted on the report that
the subject sold for $ 378,000 on March 17, 2006. Otherwise, this report is identical
to the first report, with the addition of the cost approach. Mr. Norris considered but
did not use a similar property on the same street that sold for $ 385,000 in February
2006. The third report was done effective June 1, 2006, finding an appraised value of
$ 500,000. The subject sold in April 2006 for $ 410,000. This report is a clone of the
second report. There was a more recent sale that could have been used in the report.
That property sold in March 2006 for $ 409,000. The fourth report was done in July
2006, and the appraised value is $ 510,000. This report has three additional sales that
closed in February 2006 and June 2006. In this report, Mr. Norris increased the
costs in his cost approach due to what he termed as his re- evaluation of costs. The
March and April 2006 sales of the subject are noted. On all four reports, there were
other sales in the subject’s immediate area that Mr. Norris should have considered.
Jane H. Payne A4861 ( Sherrill’s Ford)
By consent, the Board suspended Ms. Payne’s residential certification for a period
of six months. The first two months of the suspension are active and the remainder
is stayed until March 1, 2008. If Ms. Payne completes a course in sales compari-son,
a course in appraising the oddball and the 15 hour National USPAP course by
that date, the remainder of the suspension will be inactive. The Board alleged that
Ms. Payne appraised a property located in Statesville, North Carolina in May 2002,
finding an estimate of value of $ 241,000. The subject property is a brick ranch that
has a 624 square feet addition. It is located on a .31 acre site that is improved with
an in ground pool, extensive brick fence, covered brick patio, 2- car carport, and
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10
pool house. With the addition, the subject is substantially larger than the homes
in the subject subdivision. The amenities are also not typical for the subdivision.
Ms. Payne chose comparable sales from outside the subject subdivision. These sales,
although similar in size and room count to the subject, were located in superior
areas and were superior in amenity appeal and quality of construction, and she
made inadequate adjustments for these factors. There were other sales available that
would have led to a lower value for the subject property.
Terry Poole A6100 ( Raleigh)
By consent, the Board suspended Mr. Poole’s residential certification for a period of
three months. The suspension is stayed until March 1, 2008. If Mr. Poole completes
a course in appraiser liability and a course in sales comparison by that date, the
suspension will be inactive. The Board alleged that Mr. Poole and a trainee work-ing
under his supervision appraised a property located in Durham, North Carolina
in August 2006, finding an appraised value of $ 135,000. The appraisal reported
the GLA as 1540 square feet, when it was actually closer to 1270 square feet. Mr.
Poole and his trainee were using a rain- damaged sketch when they prepared the
appraisal report, so they could not read some of their measurements. In addition,
they included a small amount of unfinished/ unheated area in their GLA. As a result
of miscalculating the subject’s GLA, Mr. Poole and his trainee chose comparable
sales that ranged in GLA from 1470 to 1650 square feet. This resulted in an inflated
value for the subject property. The seller had purchased the property for $ 58,000 in
July 2006, and subsequently made over $ 30,000 in repairs and renovations to it. Mr.
Poole and his trainee did not report this sale in their report.
Regina Reaves A4668 ( Wilmington)
By consent, the Board suspended Ms. Reaves’ residential certification for a period
of for a period of one year. The first three months of the suspension are active and
the remainder is stayed until June 1, 2008. If Ms. Reaves completes a course in sales
comparison and a course in appraiser liability by that date, the remainder of the
suspension will be inactive. The board alleged that Ms. Reaves appraised a property
located in Dunn, North Carolina in October 2006, November 2006 and February
2007, each time finding a value of $ 90,000. The subject is an 1197 square foot, one-story
house with five rooms including 3 bedrooms and 2 baths. In October 2006,
the subject was listed for sale for $ 49,900 and was under contract for $ 45,500. This
report was performed subject to completion of repairs. The sales contract and list-ing
information were noted in both the October and November reports. The subject
sold on January 26, 2007 for $ 45,500, and was under contract for $ 90,000 on the
effective date of February 2007 appraisal, which was noted in the report. Ms. Reaves
the same four comparable sales in all three reports. All of the comparables were
newer and were from superior areas. There were other sales that were more compa-rable
to the subject that would have led to a lower appraised value.
Ralphele Reels A4747 ( Durham)
By consent, the Board suspended Mr. Reels’ residential certification for a period of
two years. Mr. Reels must also complete a course in the sales comparison approach
and a course in appraiser liability before the end of the suspension. If he fails to com-plete
these courses by the end of the suspension, the suspension will be extended
until he successfully complete the courses. The Board alleged that Mr. Reels per-formed
an appraisal of two properties both located in Raleigh, North Carolina
in May 2003, valuing each property at $ 345,000. Both of the properties were new
homes. Mr. Reels stated that one property was under contract for $ 329,000 and the
other was under contract for $ 324,900. The contracts in the work files indicated that
each subject was actually under contract for $ 345,000. The subject properties were
not listed for sale on the effective date of the appraisals. Mr. Reels used the same
three comparable sales in both reports. The properties did transfer as stated in the
appraisal, but it appears that these sales may not have been arms length transac-tions.
They were sales directly from the builder to the purchasers, and they had been
marketed for various prices prior to their sales. There were other sales available in
the subject neighborhood that could have led to a lower value for the subject prop-erty.
John T. Rogers, IV A3270 ( Wake Forest)
By consent, the Board suspended Mr. Rogers’ residential certification for a period
of twelve months. The first month of the suspension is active and the remainder is
stayed until May 1, 2008. If Mr. Rogers completes a course in the appraiser liability
and a course in the sales comparison approach before that date, the remainder of the
suspension will be inactive. Mr. Rogers agrees that he will not supervise any trainees
for five years. Before he does supervise trainees, he must take the Board’s supervi-sor
course. He also agrees that he will not perform any appraisals of manufactured
housing for five years and that he will complete a course in the appraisal of manu-factured
housing before he does perform any such appraisals. The Board alleged that
Mr. Rogers and a trainee performed an appraisal of a property located in Henderson,
NC in February 2002, finding an appraised value of $ 112,000. The subject property
is a 1390 square foot manufactured dwelling built in 2000. The report had the wrong
owner’s name on it. The land had transferred through foreclosure on April 25, 2001
for $ 72,000, but this information was not reported in the appraisal report. One of
the comparable sales could not be confirmed in public records, and may have been
a land/ home package. There were limited sales available, but there were some other
sales that would have indicated a slightly lower value for the subject property.
Leon Schearer A2806 ( Chapel Hill)
By consent, the Board suspended Mr. Schearer’s residential certification for a period
of six months. The first three months of the suspension are active and the remainder
is stayed until July 1, 2008. If Mr. Schearer completes a course in the sales compari-son
approach and a course in the cost approach before April 1, 2008, the remainder
of the suspension will be inactive. Mr. Scheaeer performed three appraisals of a
property located in Raleigh, North Carolina. The Board alleged that the first report
was performed “ subject to completion per plans and specifications”. It was per-formed
in August 2004 and indicated a value of $ 518,000. The second report was
performed “ subject to repairs”. It was performed in May 2005 and indicated a value
of $ 660,500. The final report was performed “ as is”. It was performed in September
2005 and indicated a value of $ 690,900. The dwelling was originally built as a one
and one half story frame dwelling on a crawl space foundation. There was an addi-tion
to the first floor of the original dwelling that contained a new master bedroom,
bath, laundry, deck and porch. Other additions and remodeling was performed.
The in- ground pool was remodeled with extensive stonework. At the time of all
three inspections, the original portion of the dwelling had not been remodeled and
was in average condition. The addition and remodeled kitchen used good quality
materials. Mr. Schearer used a cost per square foot for the reproduction cost new
of the garage in the second and third reports that was too high. His adjustments
to his sales for the room above the garage were inconsistent among the reports.
Although the third appraisal was performed “ as is” and states that the dwelling has a
“ completely renovated interior and exterior”, in fact about half of the subject had not
been remodeled. Mr. Schearer indicated an “ as is” value of the site improvements in
the first report at $ 18,500 and $ 60,000 in the second and third reports, even though
the first report was done subject to completion of renovations to the pool. He used
several sales on all three reports. He made inconsistent adjustments to his sales
between his reports, and failed to report prior sales of the subject on one of his sales.
Many of his adjustments were too low; had appropriate adjustments been made, his
appraised values would have been lower on his second and third reports.
Donald E. Spake A2890 ( Hickory)
By consent, the Board suspended Mr. Spake’s general certification for a period of
two years. If Mr. Spake completes the 15 hour National USPAP course with exam
and a course in business practices and ethics, only the first year of the suspension
shall be active. Mr. Spake also agrees that he will no longer perform any condemna-tion
appraisals or any appraisals for litigation purposes. He further agrees that he
will not serve as a consultant on any appraisal assignment, and he will not appear
as an expert witness for court or administrative agency testimony related to a real
estate appraisal or to the value of identified property. There were a total of three
cases against Mr. Spake. In the first two cases, the Board alleged that Mr. Spake
appraised a property located in Conover, NC. The city had filed a condemnation
action against the property owner for the acquisition of a permanent easement of
a portion of the tract for the establishment of a forced main sanitary sewer line. In
the appraisal process, Mr. Spake utilized an after value study prepared by another
appraiser. He was unfamiliar with the properties utilized in the study, and he did
not utilize the study in an appropriate manner. The taking consisted of .320 acres of
permanent easement for the construction, maintenance, reconstruction, enlarge-ment,
inspection, and use for a forced main sewer line. The appraisal report did not
provide an adequate description of the subject property in the before condition in
his appraisal report. Mr. Spake did not address the topography or the flood plain.
He also did not address the fact that a creek dissects the subject, and there is no
bridge from one side of the creek to the other. Mr. Spake stated that in the before
condition, the highest and best use of the 5.11 acre tract would be the development
of upper scale residential homes that would enjoy the proximity to a country club,
and especially the view of the golf course afforded the subject property. In order to
develop this property in the before condition in this manner, the property owner
would have to construct a bridge over the creek, build a lengthy driveway, and do
extensive site preparation. None of this was discussed in the highest and best use
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11
analysis in the before condition. Development of this property in this fashion would
not be financially feasible, and may not be physically possible Mr. Spake valued the
16.30 acres in the before condition at $ 10,384 an acre, for a total of $ 169,000. He used
five sales in his sales comparison approach. Two of those sales were improved at the
time of sale, but he made no adjustment to those sales for the improvements. All five
sales represented a transfer from their respective owners to the adjacent property
owner and were not arms length transactions due to the motivation of the buyer. In
the after value, Mr. Spake first applied his before value to the land to be acquired,
and valued the taking at $ 3,322 ( 13,936 square feet at $. 2384 per square foot). He then
treated the permanent easement as if it were a “ wall” across the subject property
that would preclude the construction of a bridge to connect the northern part with
the southern part of subject property. Mr. Spake assigned 50% in damages to the
entire property rather than just the 5.11 acres of what was considered developable
property in the before condition, even though the report does not specify a change
in the remainder’s highest and best use. He based that 50% damage amount from
two after value studies. One was the report prepared by the other appraiser, and one
he prepared himself. Using the study from the other appraiser, Mr. Spake delivered
a range from 25% to 84% between variously impaired properties as compared to
unimpaired properties, settling on a damage factor of 50%. The study he performed
indicated a percentage range of 34% to 64% divergence in value between properties
with impaired access versus properties with unimpaired access. Mr. Spake applied
this 50% damage factor to his after value of $ 165,678, resulting in $ 82,839 in dam-ages
to the remainder. The application of a 50% damage factor to the entire property
in the after value was inappropriate and unsupported. Mr. Spake applied damages
to the entire property regardless of whether or not access was available, which was
inconsistent with his methodology.
In the third case, the Board alleged that Mr. Spake appraised a property in Conover,
North Carolina. The effective date of the subject report is the date of taking, which
was September 10, 2001. The appraisal was performed in April 2006. The subject
property is a 3.35- acre tract of land improved with a 45- year- old single- family
dwelling and ancillary improvements. The property was subject to a condemna-tion
action initiated by the NCDOT that involved the acquisition of a permanent
right of way of a portion of the subject property. The purpose of the acquisition was
for lane creation in order to widen a road that abuts the subject property along its
eastern boundary. The taking is essentially a 32- foot wide strip that parallels the
eastern boundary of the subject property. Mr. Spake’s estimate of the before value
was $ 575,000. He concluded that the highest and best use of the subject property
before the taking would be to convert subject dwelling into a general office or medi-cal
office. He used commercial sales from within the immediate market area of the
subject property and determined a vacant land value of $ 436,000. The single- family
dwelling located on the subject property provided utility for the current owners, but
would have to be razed or converted to a commercial use for the subject to attain
its highest and best use as indicated by Mr. Spake. Mr. Spake, however, gave the
improvements their full depreciated value in his analysis without the application
of obsolescence. This violates the principle of consistent use. In his cost approach,
Mr. Spake contends that the depreciated reproduction cost of the totality of the
improvements would be $ 139,053.19. He then added the commercial value of the
land ($ 436,000) to the residential value of the improvements to obtain a total before
value in the cost approach. Mr. Spake’s election to apply a commercial value to the
before land value and then a residential value to the improvements without the
application of obsolescence or a cost of conversion resulted in an inappropriate and
misleading before value of the subject property. Mr. Spake reported that the value of
the subject property after the taking was $ 339,447. The difference in the before and
after value of the subject property, in his opinion, was $ 235,553. He applied a land
value of $ 2.99 per square foot to the area of the taking to determine a value of the
land taken of $ 9,308. He then estimated damages of $ 226,245 to the remainder of
the property after the taking for what he termed were severance damages. Mr. Spake
stated that the subject site would suffer severance damage due to the lane extension,
traffic gridlock and resulting poor desirability of the site. In order to estimate these
severance damages, Mr. Spake utilized an after value study that he prepared. Using
this study, he determined an impairment factor of 40% to the subject property after
the taking, which resulted in damages of $ 226,245. He subtracted the area of the
taking from the total property and then applies a 40% damage factor in order to
determine the damages to the remainder. There is no discussion in the report of how
he arrived at his remaining land value, other than the application of the after value
study and the damage factor that Mr. Spake determined by using this study. As in
the case of his before value, Mr. Spake combined the after land value with the full
depreciated value of the improvements, as determined in the before value analysis,
to arrive at the after value. This method is in conflict with the principle of consistent
use. Mr. Spake testified at the trial about his appraisal and conclusions. In his testi-mony,
he stated that there were damages to the remaining property after the taking
that were due to utility and trends in the neighborhood. He presented no data in
either his written appraisal or his oral testimony to support this conclusion. In both
cases, Mr. Spake did not perform the assignments in accordance with USPAP.
Charles S. Thomas, III A2830 ( Pittsboro)
By consent, the Board suspended Mr. Thomas’ residential certification for one
month. The Board alleged that Mr. Thomas and a trainee appraised a property
located in Durham, North Carolina in May 2006, finding a value of $ 650,000. The
subject property is a two- story farmhouse built in 1980. It is located on a site con-sisting
of 34.37 acres. The property was appraised subject to it being located on 4.5
acres of the total acreage. The subject has an in ground pool that is enclosed within
the dwelling. The pool area contains approximately 350 square feet. The area of the
pool was included in the total gross living area, which brought the calculated square
footage for the subject to 3762. In the sales comparison approach, adjustments were
made to the sales based on the subject containing 3762 square feet, and there were
adjustments of negative $ 5000 made to the comparable sales for the lack of a pool.
In the cost approach, the entire square footage, including the pool area, was valued
at $ 100 a square foot. The subject dwelling and outbuildings were in various stages
of completion and repair. Adjustments were made to the comparable sales for the
differences in condition compared to the subject. The third comparable sale sold
for $ 1,895,000. This sale required adjustments of $ 1,135,900 and should have been
accompanied by more explanation.
James E. Wilson A6017 ( Whiteville)
By consent, the Board suspended Mr. Wilson’s general certification for a period of
three months. The suspension is stayed until March 1, 2008. If Mr. Wilson com-pletes
a course in highest and best use and a course in sales comparison by that
date, the suspension will be inactive. There were two cases against Mr. Wilson. In
the first case, the Board alleged that Mr. Wilson appraised two properties located
in Pisgah Forest, North Carolina in April 2006. The properties are adjacent to each
other and were appraised for a potential purchaser for both properties in one trans-action.
The purchaser was interested in purchasing this property to live in part of
it and build a dog- motel on the rest of the two lots. The first property is an 1866
square foot house with a basement located on .73 acres. Mr. Wilson appraised this
property for $ 460,000. The second property is a 1.71- acre vacant tract of land. Mr.
Wilson appraised this property at $ 429,000. He first valued the vacant tract as
commercial land, which was appropriate due to its location. In the appraisal of the
improved property, he stated that the highest and best use was its current use as a
residence. He valued the land, however, as commercial. The property could have
been appraised as a single- family home with excess acreage adjusted with values
derived from similar properties. It could also have been appraised as a development
property that had a dwelling on it. By appraising the property as residential, then
adjusting his sales for the land based on commercial use, Mr. Wilson violated the
principal of consistent use. In the second case, the Board alleged that Mr. Wilson
appraised a property located in Penrose, North Carolina in May 2006, finding an
appraised value of $ 147,000. The subject property is a 1946 square foot doublewide
manufactured home located on .59 acres that has an aboveground pool. Mr. Wilson
adjusted two of his sales upward $ 10,000 as none of the sales had a pool. He made
no adjustment to a third comparable sale that had outbuildings that he considered
equal in value to the pool. These adjustments were incorrect, as the pool should
have been considered personal property and not real property.
Sherman W. Young A5234 ( Asheville)
The Board accepted the voluntary surrender of Mr. Young’s residential
certification.
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NORTH CAROLINA
APPRAISAL BOARD
5830 Six Forks Road
Raleigh, NC 27609
4,885 copies of this document were printed at a cost of $. 61 per copy.
PRSRT STD
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PAID
RALEIGH, NC
Permit No. 2483
2008 Renewal Information
All registrations, licenses and certificates expire on June 30th and must be renewed before this date to
maintain your current status. Renewal notice forms will be mailed in early May, so be sure your address is
correct. Send in your change of address form if there have been changes since last year. You will only receive
one renewal notice.
If you do not renew by June 30, your registration, license or certificate will expire. Any person who acts as
a trainee, licensed or certified real estate appraiser while expired shall be subject to disciplinary action and
penalties as prescribed by the Appraiser’s Act.
You are not required to have continuing education in order to renew this year. You will be required to
have 28 hours of continuing education of which 7 hours must be the National 7- Hour USPAP Update course
by June 1, 2009 to renew next year. It is strongly suggested that you not wait until next year to obtain all of
your required continuing education.
The renewal fee is $ 200.00 and if you want to be on the National Registry, there is an additional fee of
$ 45.00. You must be on the National Registry to prepare appraisals related to federally related transactions.
Registered trainees are not permitted to be on the Registry, but are allowed to work on any assignments their
supervising appraiser is allowed to prepare. Please note that the fee for late renewal has increased from $ 5.00
to $ 10.00 per month.